Re Rose
A gift of shares is complete in equity once the donor has done everything within his own power to transfer them, even before the company registers the transfer.
Facts
Mr Rose executed transfers of shares in a private company to his wife and to trustees, and delivered the transfers and share certificates to the company for registration in March 1943. The directors had power to refuse registration, and the transfers were not registered until June 1943. Mr Rose died more than five years after March 1943, but less than five years after June 1943. Estate duty would be payable on the shares if the gift was made only when the transfers were registered.
Legal principle
The Court of Appeal held that the gift was complete in equity in March 1943, so no estate duty was payable. Evershed MR said that, once Mr Rose had done everything in his power to transfer the shares, by executing the transfers and delivering them with the certificates, he held the legal title on trust for the donees until registration, so the beneficial interest had passed to them. The donees could have compelled him to do anything further needed. This principle is an exception to Milroy v Lord.
Related cases on formalities and constitution of trusts
- Re Brooks' Settlement Trusts [1939] Ch 993
- Cannon v Hartley [1949] Ch 213
- Choithram (T) International SA v Pagarani [2001] 1 WLR 1
- Fletcher v Fletcher (1844) 4 Hare 67
- Grey v IRC [1960] AC 1
- Hodgson v Marks [1971] Ch 892
- King v Dubrey [2015] EWCA Civ 581, [2016] Ch 221
- Mascall v Mascall (1984) 50 P & CR 119
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