Allnutt & Anor v Wilding & Ors

Allnutt & Anor v Wilding & Ors

Rectification is not available where the settlor's mistake relates to the fiscal consequences of the settlement rather than a mistake in the recording of his intentions or the legal effect of the document. The settlement accurately reflected the settlor's intention to create a discretionary trust for his children, and the mistake was only as to the tax consequences, not the effect or terms of the trust.

Parties
Appellant: Allnutt & Another; Respondent: Wilding & Others
Jurisdiction
England and Wales
Judgment Date
03 April 2007
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Rectification of Trusts, Mistake in Voluntary Settlements, Inheritance Tax, Potentially Exempt Transfers (pet)
Equity Trusts Taxation Rectification of Trusts Mistake in Voluntary Settlements Inheritance Tax Potentially Exempt Transfers (pet)

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Parties

Allnutt & Another

Appellant

Wilding & Others

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether the court can rectify a voluntary settlement where the settlor was mistaken as to the fiscal effect of the trust instrument, specifically regarding inheritance tax treatment and PET status.
  2. 2 Whether the mistake was as to the effect of the document or merely its consequences.

Ratio Decidendi

Rectification is not available where the settlor's mistake relates to the fiscal consequences of the settlement rather than a mistake in the recording of his intentions or the legal effect of the document. The settlement accurately reflected the settlor's intention to create a discretionary trust for his children, and the mistake was only as to the tax consequences, not the effect or terms of the trust.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; no rectification granted.