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Barrister and accountant contest father’s £3m Holocaust fund

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Issue over unequal shares centres on applicability of foundations under English law, says trusts expert

24 February 2016

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A brother and sister are contesting a £3.2m fund set up by their deceased Jewish father in case of a 'repetition of the Holocaust'.

David Hamilton, who died in 2007, left approximately £1m from his Rainbow Foundation in Liechtenstein to his accountant son, Alan, and £2.2m to his barrister daughter, Carolyn.

Claiming he discovered the unequal split four years later, Alan Hamilton issued proceedings against arguing that the fund should have been shared equally pursuant to his father's will.

The High Court has heard how David Hamilton amassed a UK estate valued at £4.5m through business ventures in fashion and property after arriving in England as a 'penniless' refugee in 1938.

Alan Hamilton has accused his late father of dodging tax by shifting money overseas to deceive HMRC, a claim his sister Carolyn Hamilton has dismissed.

David Halpern QC, acting for the sister, told the court that the deceased would never have evaded taxes and moved funds overseas out of fear that history might repeat itself.

On receiving the larger share, Carolyn, who is the director of international programmes and research at Coram Children's Legal Centre, said she believed her father was rewarding her for being a 'good daughter', who helped out with his business and cared for one of his eldest friends.

Steven Kempster, a partner in Withers' contentious trusts team, believes the issue in the case centres on a clash of legal systems.

'A foundation has no real equivalent under English law but is quite common in continental legal systems,' he said.

'In a number of cases we have seen, foundations can be treated simply as a bank account belonging to the person who set them up, while in others the rules of the foundation will be given legal recognition and will determine who gets what benefits and when.

'It will very much depend on the rules of the foundation and what rights the person who set it up has or had before they died,' Kempster added.

'The English judge has to decide if the rules of the foundation, a creature unknown to English law, are legally effective under English law.'

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Wills, Trusts & Probate Courts & Judiciary