Representation of Affinity Trust Limited re Tamar Trust and Exe Trust [2023] JRC 157 (31 August 2023)

Representation of Affinity Trust Limited re Tamar Trust and Exe Trust [2023] JRC 157 (31 August 2023)

The Trustee failed to take into account relevant tax considerations due to incorrect advice, resulting in distributions that would not have been made had the correct position been known. The Court declared the distributions void and held on bare trust for the Trustee, applying Article 47H of the Trusts (Jersey) Law 1984.

Citation
[2023] JRC 157
Parties
Trustee: Affinity Trust Limited; Beneficiary/settlor: X; Beneficiary/settlor: Y; Interested Party: Attorney General; Interested Party: HMRC
Jurisdiction
Jersey
Judgment Date
31 August 2023
Procedural Posture
Trustee Application Under Trusts (jersey) Law 1984 Article 47 H / Final Judgment With Orders Granted
Outcome
Relief granted; distributions declared void and held on bare trust for Trustee.
Legal Topics
Mistake in Exercise of Trustee Powers, Tax Consequences of Trust Distributions, Rescission of Distributions, Article 47 H Application
Trusts Taxation Private Wealth Mistake in Exercise of Trustee Powers Tax Consequences of Trust Distributions Rescission of Distributions Article 47 H Application

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Parties

Affinity Trust Limited

Trustee

X

Beneficiary/settlor

Y

Beneficiary/settlor

Attorney General

Interested Party

HMRC

Interested Party

Procedural Posture

Trustee Application Under Trusts (jersey) Law 1984 Article 47 H / Final Judgment With Orders Granted

Legal Issues

  1. 1 Whether distributions made by the Trustee are voidable under Article 47H of the Trusts (Jersey) Law 1984 due to failure to take into account relevant tax considerations
  2. 2 Whether the distributions should be declared held on bare trust for the Trustee
  3. 3 Whether relief should be granted to retrospectively annul tax consequences

Ratio Decidendi

The Trustee failed to take into account relevant tax considerations due to incorrect advice, resulting in distributions that would not have been made had the correct position been known. The Court declared the distributions void and held on bare trust for the Trustee, applying Article 47H of the Trusts (Jersey) Law 1984.

Court Disposition

Relief granted; distributions declared void and held on bare trust for Trustee.

Orders

  • Distributions made by Pinnacle/Trustee to X and Y are voided and of no effect from the time exercised.
  • Distributions held on bare trust by X and Y for the Trustee from the date of each distribution.