However, the transfer and the omission could not properly be taken together for the purposes of section 10. They did not constitute a “series of transactions and any associated operations” because there was no common intention linking them together as a scheme to confer gratuitous benefit.
The final question was whether the omission was to be treated as a disposition by virtue of section 3(3). It was common ground that Mrs Staveley’s estate was diminished by her omission to exercise her right to lifetime benefits under her pension and that her sons received the resulting death benefits some months after her death.
The dispute was as to whether it could be said that “the value . . . of another person’s estate” was “increased by” her omission, within the meaning of section 3(3).
The executors argued that for matters to come within section 3(3) the omission had to be the immediate cause of the increase in the value of another’s estate, with there being immediacy both in terms of timing and in terms of cause and effect.
In the present case, the omission yielded the death benefits that, in fact, increased the sons’ estates. The limited discretion of the scheme administrator did not break the chain connecting the two events.
To say that it did would be to adopt a narrow and legalistic approach to section 3(3) which did not seem appropriate. Putting it another way, the omission was the operative cause of the increase.
Lord Hodge, with whom Lord Sales agreed, gave a judgment agreeing with Lady Black on Transfer Issue 1 and the omission issue, but reaching a different conclusion on Transfer Issue 2.
The judgement further increases the pressure on advisers to be conservative in their advice to clients, moderating advice given where the greyer areas of intent and effect override the latitude the rules themselves allow.
