Killearn v Killearn

Ch D; Jeremy Cousins QC; 18th October 2011

Mother, who was 101 years old, was the life tenant of a settlement.  Her son would become life tenant after her death.  Subject to their interests, grandson would take the fund absolutely.  The trust fund was a Grade 1 listed 17th century country house, badly in need of maintenance and repairs.  Mother lived in a granny flat in the property.

Mother, son and two others were the trustees.

As the outgoings of the settlement exceeded its income, mother sought an order that the house be sold.  She claimed that there were tax advantages in a sale and had found a buyer who would pay £1.65m for the property and allow her to stay in her granny flat for the rest of her life.  The two independent trustees supported the claim but son and grandson resisted it, alleging that there would be tax advantages in not selling the porperrty until after monther's death, but even if the property must be sold, it should be done only after a proper marketing campaign.

It was held that there were probably capital gains tax and inheritance tax disadvantages in an immediate sale; that, although the property did require urgent repairs of over £1m, they were not so urgent that they could not await a proper marketing campaign of a few months; that there was little evidence that mother had tried to obtain the best possible price; and that the best was forward was a marketing campaign by reputable agents after careful planning.  The claim was dismissed.