Heavy taxation by Estate Duty and Income Tax has recently led to a serious consideration of the avoidance of this onerous liability by means of gifts made by a donor in his lifetime and, in the case of a settled fund, of an exchange of benefits where the Beneficiaries can come together and bring the trusts to an end.

If, in the case of a Settlement, Life Tenant and Reversioner can by mutual agreement arrange to divide the Fund between them, the Life Tenant may benefit considerably by realizing a sum in excess of the market value of his interest and using it to provide as much or more spendable money than before. He may also promote a smaller liability to Sur-Tax. The Reversioner may succeed in securing a cash sum larger than he could expect at a future date on the death of the Life Tenant reduced as it would be by Estate Duty at the aggregable rate applicable to the Life Tenant.