CG37543 - Absolute entitlement: wills or intestacies: land
Introduction
The principle of Crowe v Appleby applies where a will leaves land in trust and there are some absolute interests whereas other persons have life interests or contingent interests. More common is the case where a person dies without leaving a will (`intestacy’). In such a case the widow, widower or surviving civil partner has a statutory legacy of a fixed amount, and is entitled to a life interest in half the remainder. The children (or parents or brothers and sisters) are entitled to half absolutely, if over eighteen, and the remainder on the death of the widow, widower or surviving civil partner. If the estate includes land, then that land is settled property as a whole, and any disposal is by the trustees alone. There is support for this conclusion in the judgment of Sir John Pennycuick at 51TC487, Section I, where he says that there is a single settlement, not a double one whereby the trustees hold the property in trust for themselves as tenants in common.
In general the same is true of a deed as of a will. However it is possible that a deed may have been drawn up in such a way that it specifically gives a particular beneficiary a tenancy in common, rather than merely an absolute interest in a share of the trust property.
Sales of land
If the trustees sell the land in question after the first contingency then the principle of Crowe v Appleby ceases to apply, even if the proceeds are used to buy further land. Once the sale has taken place the trust fund, or the relevant part, consists of cash, and the beneficiaries with absolute interests can call upon the trustees to hand over their share of the money. If further land is bought then there is a tenancy in common, see CG70500+, with the tenants in common being the trustees of the original settlement and the absolutely entitled beneficiaries.
Other trusts of land
The decision in Crowe v Appleby, 51TC457, is not applicable to all cases in which the trustees of settled property own land. In determining whether the principle at CG37540, which is based on that decision, applies, it is necessary to consider both the location of the land (since the Law of Property Act 1925 applies in England and Wales but not in Scotland or Northern Ireland) and the trust law in the country in which the trust was set up.
It should be accepted or contended that land owned in England, Wales or Scotland by the trustees of an English trust is within CG37540.
Scottish trusts
On the other hand, where a trust is subject to Scottish law, the principle at CG37540 does not apply. Land is therefore treated in the same way as any other asset. However, the principle at CG37530 means that, unless the power referred to is specifically excluded or the last contingency has occurred, absolute entitlement does not occur prior to the trustees’ intimation to the beneficiary that particular property has been appropriated to him or her.
Land in Ireland
The principle of Crowe v Appleby does not apply to land in Northern Ireland or the Irish Republic, because in both the beneficiary could call upon the trustees to convey to him or her an undivided share in the property.
Settlement of undivided share
If a person settles by deed or will an undivided share in land, or unusually trustees acquire such an interest, this is not subject to the principle of Crowe v Appleby, because it is readily divisible.