Author: Richard Wilson (2002)

Richard Wilson considers the way in which tax is charged equitable compensation paid by a trustee in recompense for a breach of trust or other equitable duty (taken from Issue No 18  –  January 2002)

The first question to be answered is ‘what is meant by equitable compensation?’ This is a question to which there is no easy answer, and certainly no definitive answer of a length appropriate to a short article such as this. The briefest definition which can be provided is that equitable compensation is ‘a loss based remedy for breach of an equitable duty’. However this definition requires further explanation.