The High Court has sided with a group of charities in a dispute about the construction of a will, in a decision which could influence the interpretation of nil-rate band clauses.
Royal Commonwealth Society for the Blind v Beasant and Davies concerns the will of Audrey Thelma Anita Arkell, who died in 2017 at the age of 91. Arkell’s estate has a probate value before inheritance tax of over £3.1m.
The claim was brought by the Royal Commonwealth Society for the Blind – which represented 20 other charities – against executors and trustees under the will. The first defendant, John Wayland Beasant, is a named beneficiary and the second, Benjamin How Davies, is a solicitor at Alletsons Solicitors. Davies did not attend the hearing and was not represented.
Arkell left Beasant a £240,000 apartment, shares worth £218,256, and personal items valued at £1,390, free of tax. She left legacies totalling £45,000 to other friends and relations, and gifted the rest of her estate equally between 21 charities.
The dispute hinged on a clause in Arkell’s will, which stated: '4. I give the nil-rate sum to my trustees on trust for my said friend, John Wayland Beasant.
'4.1. In this clause “the nil-rate sum” means the largest sum of cash which could be given on the trusts of this clause without any inheritance tax becoming due in respect of the transfer of the value of my estate which I am deemed to make immediately before my death.’
The nil-rate band at the date of Arkell’s death was £325,000, and Beasant argued that the clause meant he was entitled to £325,000 free of inheritance tax on top of his other legacies. However, the charities contended that the sum due to Beasant was the amount of money left – if any – after the deduction of all the other legacies on which inheritance tax was charged at the nil-rate.
‘As the value of the other legacies and devise exceed the nil-rate limit, there is no sum payable to the first defendant,’ the charity argued.
Beasant contended that it would be ‘whimsical or harsh’ to construe the clause in this way. However, Master Shuman rejected his argument, saying it would do ‘considerable violence to the language of the will to effectively read clause 4 as meaning a sum which equates to the nil rate band at the date of death of the deceased and to ignore sub-clause 4.1 in its entirety’.
She added that if the deceased had intended to gift the nil rate band to Beasant ‘the will could simply have said that’.