Generally, where spouses are afforded special treatment (whether favourable or unfavourable) by tax law, that same treatment is afforded to same-sex marriages and to civil partnerships. (Quick digression – remember that while permanently separating from a spouse or civil partner will potentially make a difference for Income Tax and Capital Gains Tax purposes, it’s only the decree absolute which matters for Inheritance Tax purposes).
But what about references to spouses in other documents, such as deeds? A document may have been drawn up at a time when ‘spouse’ could only mean a person of the opposite sex with whom one had contracted marriage: but must references in such a document to a ‘spouse’ continue to be interpreted as having that meaning?
The point was among those considered by the High Court in Goodrich & Others v AB – MN [2022] EWHC 81 (Ch). It’s not a tax case but it did concern the interpretation of the provisions of an Employee Trust and an Employee Share Ownership Plan.
The task of the court in such a case has been expressed as being to ascertain:
‘The objective meaning of the words used, and the objective intentions of the parties to it (or in the case of a unilateral document such as a settlement or a will, the settlor or testator) by interpreting the whole of the words used against their documentary and factual context.’
It was held that, in the context of the arrangements in Goodrich, ‘spouse’ was to be taken to include both civil partners and same-sex spouses.
However, that might not always be the case – the judge recognised that her construction is ‘fact sensitive to the background facts in this case including the fact that WBET is not a family trust but a more flexible ‘living and breathing’ long term employee trust; a key feature of which is to reward officers or employees for past contributions.’ The same conclusion might not be reached in the case of a private family trust, which the judge recognised as ‘a far cry from the employee trust that I am grappling with’. Indeed, the same conclusion might not be reached in the case of another employee trust with different background facts.
So, the most that can be said is that ‘spouse’ where used in a trust deed is capable of including same-sex spouse and civil partner; not that it will always do so.
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