Section144 is a tax provision. It has no effect on succession under the will.
As Michael suggests., the answer to Simon’s question all depends on construing the whole will.
I had a not dissimilar case a couple of years ago, with one of these two year trusts. They were always a misconceived way of taking advantage of s144 and I hope
nobody is putting a two year time limit in any longer.
In my case Dad had died what was then 19 years previously. A 10 year charge had been duly paid 9 years before and it was only as the trustees were planning for the next 10 year charge, and whether it was better to wind the trust up before it struck, or to
keep the trust going and pay it, that someone drew attention to the two year limitation on exercising most of the discretionary powers. Nobody had noticed this in the previous 19 years and the lawyer who was first consulted said that the trust had come to
an end two years after death.
It came to me and a colleague and we both reached the conclusion that what had actually happened was that the trustees had, by failing to exercise the discretionary
trusts within two years, but keeping everything going, actually exercised the very wide power of advancement given to them by the will (which was not time-limited). By continuing to run a discretionary trust, with the consent of all the family members, they
had applied the funds for the benefit of all the beneficiaries on the discretionary trusts, but now without a time limitation.
Fortunately everyone who might have had an interest if the trust had ended after two years was of full age and capacity so, having advised them all of their right to take independent advice, we prepared a deed for them to sign to give the trustees the comfort
that they could safely continue to treat the trust as discretionary. Otherwise, I think we would have had to apply to the court.
And, for those who are interested, the final decision was to take some assets out of the trust before the 10 year anniversary and leave others in.
Irwin Mitchell Private Wealth