Formalities (You can also use this essay for problem question)

One of the most important ways to tell whether a trust is legitimate or not is by
looking at it follows the two requirements given under the Law of Property Act
1925. The declaration of a trust over any land should be established by some
instrument which has been signed by some person / individual who has been
authorized to declare such trust or through his or her will and that is under
section 53(1) (b) of the Law of Property Act 1925 which states that a settlor who
intends to publicize the trust he is making must do so in writing or through
any document and that such a document will be used to disclose the trust's
subject matter, the trust's participants, and the trust's property handling
instructions. Gardner Vs Rowe shows that once a declaration has been made,
it is acceptable to offer written evidence.
Furthermore the Act requires a written declaration to be signed by an
individual with the capacity to proclaim such a trust, suggesting that the
settlor may also sign the trust he has formed. Keep in mind that the law does
not specify whether the trust would be nullified if subsection 53(1) (b) is
disregarded. But, as the Gardner case shows, a trust is invalid and
unenforceable if its declaration is not in compliance with the law. In another
case, Paul Vs Constance, the court had no problem with a trust statement
being presented orally. The information provided by clause 52(2) is especially
important since it clarifies that section 53(1) of the Law of Property Act of 1925
does not apply to resulting trusts or constructive trusts. Land and buildings
are examples of real property, although personal belongings are not included
under the Law of Property Act of 1925.

Part II of the Law of Property Act of 1925, Section 53(1) (c).

Every transfer of an existing equitable interest or trust must be in writing and

signed by the person effecting the transfer or by his agent who has been
lawfully authorized in writing or by a will, as required by Section 53(1) (c) of the
Law of Property Act of 1925. The topic of equitable interests is discussed here.
A beneficiary acquires a beneficial interest in the property upon being named
as such by the settlor, and may subject to section 53(1), transfer this interest
to another person. (c) This transfer of an equitable interest must be in writing
to comply with LPA 1925.
COMPARISON WITH SECTION 53 (1) (b) OF THE LPA 1925

Section 53(1) (b) stipulates that any transfer of land must be supported by
proof; hence, this clause can also be referred to as a rule of evidence, as it
requires a written declaration of trust that has been signed by the settlor.
Substantive law norms such as 53(1) (c) and the case of Grey Vs IRC
demonstrate that a non-written determination is always invalid.

WHAT KINDS OF TRANSACTIONS ARE CAUGHT?

Dispositions and assignments were held to be separate legal notions by the
court in Grey Vs IRS. Hence, the court considered any conveyance of a
beneficiary's equitable interest to another person, whether it be real or personal
property, to constitute a disposition.
There are two inquiries to make regarding business deals. If the beneficiary's
action is not a disposition, then section 53(1)(c) of the LPA 1925 does not
apply; if it is a disposition, then the second question is whether the disposition
has been set down in accordance with section 53(1)(c) of the LPA 1925. (1). (c).
The absence of a written disposition renders the disposition null and void.
A direct transfer of equitable interest from one receiver to another is the first
type of transaction we'll examine today among many others. We'll start by
checking to see if this is a sale under S53 (1) (c) of the LPA 1925. This
transaction is considered a disposal under the court's expansive definition.
Second, we'll check to see if it complies with the LPA 1925's section 53(1)(c),
which stipulates that a valid disposition must be in writing.
In the second kind of deal, the recipient gives up his or her equitable stake to
another party. Although the law is hazy on the subject, it is generally accepted
that a transfer of an equitable interest will be considered a disposal under
Section 53(1). (c). In the case of IRS Vs Buchanan, the CA ruled that a
beneficiary's voluntary relinquishment of a power constituted a disposition that
required a written instrument.
The Court of Appeal held in Re Paradise Motors Co Ltd that disclaimers do not
operate through the process of disposition, hence they are not covered by
section 53(1)(c) of the Act. This is due to the fact that if the recipient disavow
the property, he will never be vested with any equitable interest in it. Hence,
since there is no property to dispose of in the absence of an equitable interest,
LPA 1925 does not apply. Yet, there is another school of thought, as seen by
the disclaimer decision of Re Stratton, which holds that a disclaimer is a
disposition since the beneficiary loses the right he formerly held.
The fourth kind of deal is a beneficiary's self-declaration of trust, sometimes
known as a sub-trust. When the primary beneficiary states that he is holding
the equitable interest in trust for the secondary beneficiary, a sub trust is
created. When a beneficiary lawfully establishes a subtrust to protect his
equitable interest, Section 53(1)(c) does not apply. A beneficiary is more than
simply a conduit in a sub trust if they also have duties and responsibilities as
trustee. Grainge Vs Wilberforce is the precedent for this case. Nevertheless, if
the beneficiary is passive and serves solely as a conduit, the arrangement is
not a sub trust. For purposes of section 53(1)(c) of the LPA 1925, a written
declaration of disposal is required since the primary beneficiary is removed
from the picture if the sub beneficiary contacts the beneficiary directly to
obtain his benefits. To sum up, LPA 1925 53(1)(c) does not apply to a real sub
trust when there is an active-duty sub trust, as demonstrated in the case in Re
Lashmar, but a disposal of an equitable interest where the beneficiary has no
active responsibilities to undertake must be in writing (c). Penner disagrees and
argues that even if there is unanimity on this idea, the major beneficiary
cannot simply drop out of the picture since no trustee would take over the
trust for his sub beneficiary if that was not why the trustee was chosen by the
settlor. Penner's approach was accepted in Nelson Vs Greening and Skye's, and
penner himself acknowledged this judgment as substantial authority for
abandoning the difference between a genuine sub trust and a non-genuine sub
trust. Nonetheless, Nelson believes that all sub trusts, whether real or not,
should be subject to the same criterion, which is that they are not a disposition
under Section 53(1)(c) and so do not need writing.

Oughtred Vs Inland Revenue Commissioners is the leading case on the subject

of a beneficiary's contract to assign their rights. The mother and son in this
case had an informal agreement wherein the mother transferred the legal
interest in 72,000 shares she owned in return for the son receiving the
equitable stake. After the settlement, she had a legal and equitable interest in
all 2,000,00 shares, and the trustees transferred legal ownership to her. Once
the transaction was finalized, it became unclear whether a 50p charge or an ad
valorem stamp tax should be applied to the paperwork. When the ownership of
a piece of property changes hands, a tax called ad valorem duty must be paid.
The transfer of beneficial interest in the property necessitated an ad valorem
tax, as determined by the House of Lords. In his dissenting opinion, Lord
Radcliffe argued that as Mrs. Oughtred had already become the owner of equity
as the owner of beneficial shares, the agreement between them had just
constituted a constructive trust and there had been no transfer of beneficial
interest. Although section 53(2) of the LPA 1925 explicitly provides that section
53(1) does not apply to resulting and constructive trusts, the minority opinion
found that section 53(1) does not apply in this situation. In the case of Neville
Vs Wilson before the Court of Appeal, this dissenting opinion became binding
precedent.

Sixth transaction: a benefactor tells his trustees to hold the rights in trust for
someone else.
In this situation, Grey Vs IRC is the leading precedent. The court ruled that
section 53(1)(c) of the LPA 1925 requires a written request from a beneficiary to
his trustees to hold the equitable interest on trust for a third party.
7) The declaration of trust made by a TRUSTEE on behalf of a third party with
the consent of the current beneficiary.
In this situation, the case of Vandervell Vs IRC is the highest legal authority. It
has been held that section 53(1)(c) is not applicable in situations where there is
an absolute transfer of property since a transfer of both legal and equitable
interest does not constitute a disposal.