The art of the judicial creation of property rights is not limited to the Higher Courts of England and Wales.
The issue of whether a usufruit or a quasi-usufruit is a “right of enjoyment” as it has been alleged by HMRC , and by certain English solicitors on a broad brush basis, has in fact been resolved by Courts of the the lex situs in a manner which is incontrovertible.
The basis of the issue was that the owner of the property had given a specifically drafted rights of enjoyment or jouissance to a foundation, over a property in Paris. Were it to have been a usufruit, a quasi-usufruit or a right of use and occupation, then the right would have extinguished at nil value and would no longer be available after the statutory period of 30 years, the foundation, being a legal entity under article 669 Code civ,
On 31st October 2012,the French Cour de cassation “broke” a judgment of the Cour d’appel which had assimilated the specific set of rights of enjoyment or jouissance created to a usufruit, quasi-usufruit or of use and occupation. The Cour de cassation thus upheld and maintained the right of the Foundation to continue to enjoy possession of the property which it occupied under the rights granted in the notarial deed which created them, some 75 years prior to the judgment. It- did so by removing the rights of _Jouisssance _created under the acte / deed from the provisions as to length of term applicable to usufruits and assimilated property rights under that section of the Code civil. That given s.1 LPA 1925 is not possible under the laws of England and Wales. I forbear from any attempt to comment on our indigenous Scottish civil law jurisdiction, nor on that of the Bailiwicks, where there remains a distinction between the usufruit and other forms of title, but which has been translated as a right of enjoyment, which is therefore a gross simplification in translation. depending upon which manner you wish your Channel Island client’s to be cooked, it is still best to refer to a Bailiwick usufruit as a usufruit or usufruct and not as the broad brush and enrtirely ambiguous anglicism
In short the notion of numerus clausus, or the notion of a limited and exclusive list of property rights available to subjects over French property has been reformulated by reference to the right of an owner to create by specific disposition rights out of the property of which they are the absolute owner and have absolute rights of disposition of the deconstructed attributes of ownership.
The use of the term right of enjoyment encompassing British comparables by HMRC to attempt to cover a usufruit or a droit d’occupation ou d’usage therefore needs ot be very circumscribed, as technically, the term droit de jouissance in France can now exclude these specific real rights, by the developing notarial forms of specific droits de jouissance created under the definition of propriété as being the absolute right to dispose of a given property, thus enabling these specific dispositions to be made.
That in turn renders any attempt to apply a fictional “settlement” under s43(2) ITA by HMRC even harder to justify than at present, as put simply the owner creates a legal, not equitable right of jouissance, translated as “enjoyment”, and not any equitable right which can be overridden under s.2 LPA 1925 et seq. with the eternal need to find a “trustee” in a unitary civil law jurisdiction in which the trust and the concept of equitable interests are complete anathema. The somewhat cavalier use of the English term “enjoyment” in relation to usufruits and similar French legal rights may now have become well and truly lost in translation.
The French have the facility of creating separate legal rights, or droits réels, over the same “property”, and these have to be recognised as such under s.272 ITA 1984.
There is I understand some academic research being done as to whether a similar exception or provision can be made in s.1 LPA 1925 as to the definition of legal estates at the moment, but that has gone a little quiet, so the draftsman of the simplification of English land law in 1925 may still be resting in peace.