JTC Employer Solutions Trustee Ltd & Ors v Garnett & Anor (Rev1) [2024] EWHC 3128 (Ch) (09 December 2024)

JTC Employer Solutions Trustee Ltd & Ors v Garnett & Anor (Rev1) [2024] EWHC 3128 (Ch) (09 December 2024)

The deeds of appointment were executed under an operative mistake as to the inheritance tax consequences, specifically the continued application of s.86 IHTA 1984. The mistake was sufficiently grave and causative, and it would be unconscionable to leave the appointments uncorrected given the significant tax liability. There was no evidence that the claimants knowingly ran the risk, nor was there sufficient public policy or laches reason to refuse relief. Accordingly, the court granted rescission of the relevant deeds of appointment.

Citation
[2024] EWHC 3128 (Ch)
Parties
Claimant: JTC Employer Solutions Trustee Limited (as Trustee of the Henderson Family Benefit Trust and of the Henderson Group PLC Employer Financed Retirement Scheme); Claimant: Janus Henderson Administration Limited; Claimant: Janus Henderson UK (Holdings) Limited; Claimant: Janus Henderson Investors UK Limited; Defendant: Mr William Garnett; Defendant: Mr Manraj Sekhon
Jurisdiction
England and Wales
Judgment Date
09 December 2024
Procedural Posture
Rescission Claim (chancery Division, Property, Trusts and Probate List) / Judgment After Contested Hearing
Outcome
Claim allowed; deeds of appointment rescinded.
Legal Topics
Rescission of Voluntary Dispositions, Mistake in Trust Law, Inheritance Tax Act 1984 S.86, Employee Benefit Trusts, Discretionary Trusts, Tax Avoidance, Public Policy in Tax Cases
Equity and Trusts Tax Law Rescission of Voluntary Dispositions Mistake in Trust Law Inheritance Tax Act 1984 S.86 Employee Benefit Trusts Discretionary Trusts Tax Avoidance +1 more

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Parties

JTC Employer Solutions Trustee Limited (as Trustee of the Henderson Family Benefit Trust and of the Henderson Group PLC Employer Financed Retirement Scheme)

Claimant

Janus Henderson Administration Limited

Claimant

Janus Henderson UK (Holdings) Limited

Claimant

Janus Henderson Investors UK Limited

Claimant

Mr William Garnett

Defendant

Mr Manraj Sekhon

Defendant

Procedural Posture

Rescission Claim (chancery Division, Property, Trusts and Probate List) / Judgment After Contested Hearing

Legal Issues

  1. 1 Whether deeds of appointment under employee benefit trusts should be rescinded for mistake as to inheritance tax consequences under s.86 Inheritance Tax Act 1984
  2. 2 Whether the mistake was sufficiently grave and causative to justify rescission
  3. 3 Whether public policy or delay/laches should bar relief

Ratio Decidendi

The deeds of appointment were executed under an operative mistake as to the inheritance tax consequences, specifically the continued application of s.86 IHTA 1984. The mistake was sufficiently grave and causative, and it would be unconscionable to leave the appointments uncorrected given the significant tax liability. There was no evidence that the claimants knowingly ran the risk, nor was there sufficient public policy or laches reason to refuse relief. Accordingly, the court granted rescission of the relevant deeds of appointment.

Court Disposition

Claim allowed; deeds of appointment rescinded.

Orders

  • Rescission of the relevant deeds of appointment executed under the HFBT and EFRBS for mistake as to inheritance tax consequences.
  • No order as to costs against the defendants, who did not oppose the claim.