[Qoph]

Ted was the trustee of the Hopkinson family trust. In April 1999 he exercised
a power of appointment in favour of Carolyn, one of the beneficiaries,
appointing her £200,000 in order to allow her to give it to her husband, Fred
(who is not an object of the trust), to use in his business.

Any ideas as to what the issue could be? I don't see how giving money to Carolyn could amount to a breach of trust-

(Ted commits various breaches which are irrelevant for the rest of the question)

Ted has been removed under a power in
the trust instrument and replaced by Barbara.
In January 2008 Barbara exercised a power under the trust to apply money
for the benefit of one of the beneficiaries, Paul, by tratnsferring £2m on trust
to trustees under a new settlement for Paul. Barbara now realises that this
transaction gives rise to a £1m tax liability which could have been avoided
had the transfer not been made.
Advise Barbara.

Here I have some ideas: Barbara could be liable for breach of trust. s.1 Trustee Act 2002. Surcharging (Ultrafame). There is the possibility for an indemnity if Paul had been involved in the transaction (s.63 Trustee Act). But this looks unlikely, Could she not argue that transaction is void? s. 53 1 (c) but it looks more like the Vandervell I scenario. Any ideas why Vandervell should not be applicable here?

[suffocation1992]

Eurgh I tried this one and gave up, it was way too hard (the rest of the question too).

[Festina lente]

(Original post by Qoph)
Any ideas as to what the issue could be? I don't see how giving money to Carolyn could amount to a breach of trust-

I think it's a question of whether it is fraud on a power - as Fred isn't a beneficiary and the money was only given to Carolyn to enable her to pass it on to Fred.

Here I have some ideas: Barbara could be liable for breach of trust. s.1 Trustee Act 2002. Surcharging (Ultrafame). There is the possibility for an indemnity if Paul had been involved in the transaction (s.63 Trustee Act). But this looks unlikely, Could she not argue that transaction is void? s. 53 1 (c) but it looks more like the Vandervell I scenario. Any ideas why Vandervell should not be applicable here?

I think this is on Hastings-Bass - on which of course see now Pitt v Holt, Futter v Futter.

[gethsemane342]

2nd one is definitely asking you to consider Pitt v Holt [2011] especially given the distinction between consequence and effect it draws with regard to taxation.