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Mr Oughtred wished to transfer some company shares to which he was entitled under a trust to his mother. Believing that the formal transfer of legal title would attract stamp duty, the parties executed a contract under which Mr Oughtred transfered the shares to Mrs Oughtred on bare trust, in return for which Mrs Oughtred would transfer some different shares to Mr Oughtred. Their argument was that the beneficial interest passed under the (oral) contract so that, when the formal transfer of legal title was effected, there was no transfer of beneficial interest. Because there was no transfer of beneficial interest, stamp duty was not payable on the document.

The House of lords agreed that the contract had served to transfer the beneficial interest, and that the transfer was valid despite the requirements of s.53(1)(c) of the LPA (1925), because aConstructive Trust arose in favour of the mother, and such trusts are specifically exempted from s.53(1).

However, the House held, by a majority, that stamp duty was payable anyway, because the intention of the stamp duty legislation was to tax property transfers, and technical methods for transfering property should not escape.

In grey v irc (1960), another House of lords case heard about the same time, a similar outcome was reached by a different means. In Grey, the House held that an instruction to trustees to transfer an equitable interest from one beneficiary to another was a disposition within the scope of s.53(1)(c), and hence void. So that later formal statement made to the Inland Revenuse was itself a dispostion, and attracted stamp duty.