Importance of stable legislative regimes
In a compelling speech on law reform late last year, Lord Neuberger expressed the very wise view that: where the present law is tolerably clear, well understood, and workable, particularly in a slightly technical field where there is no perfect answer, leave the law alone. 1
That view seems to have prevailed so far in trusts. Busy trust practitioners, and trustees, have cause to be grateful that trust legislation generally reflects the values of continuity and stability, and thereby preserves the enduring value of long-standing authoritative judgments. Trustee, and trust adviser, thus are spared the regular destruction of hard-won knowledge and intuition that afflicts those who work in tax, or in areas of commercial regulation. In Fortune 17 January 2011, 50, Geoff Colvin wrote that, in the United States: Everyone agrees that our 3.7-million-word tax code is an abomination that encourages unproductive tax avoidance and burdens our economy with massive compliance costs.
The sheer economic stupidity of the constant tinkering that legislators in the United States, Australia, and New Zealand seem unable to resist is writ large in the UK’s recent, grossly overweight, Tax Rewrite.
Not only ‘massive compliance costs’ but also dissipation of commercial energy, caused by insanely complex, and minutely prescriptive, legislation, inevitably inhibit wealth creation. Because the trust is the preeminent means of wealth preservation and accumulation, any curbs on its creation are of concern to trustees and their advisers.
On 29 October 2010, under the chairmanship of Prof. John Tiley, Her Majesty's Revenue and Customs held a conference in London on the Tax Law Rewrite that was just completed. Speakers included Lord Howe, the ‘father’ of the project; Dave Hartnett, the Permanent Secretary for Tax; Tony Molloy QC, co-editor; Victor Thuronyi, Senior Tax Counsel to the International Monetary Fund; Prof. Peter Melz, University of Stockholm; …
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