Representation of Crestbridge Trustees Limited and Anor re Avocado Trust [2021] JRC 171 (15 June 2021)

Representation of Crestbridge Trustees Limited and Anor re Avocado Trust [2021] JRC 171 (15 June 2021)

The Trustee made a serious mistake as to the tax consequences of procuring the Company to hold property as nominee, resulting in a substantial SDLT liability. The mistake was sufficiently serious and it is just to set aside the exercise of power and related documents under Articles 47G and 47H. The Trustee failed to take into account relevant considerations due to reliance on incorrect advice.

Citation
[2021] JRC 171
Parties
First Representor / Trustee: Crestbridge Trustees Limited; Second Representor / Company: Avocado Limited; Beneficiary: A; Family Office: B Limited; Legal Adviser: Payne Hicks Beach; Legal Adviser (2021 Opinion): Charles Russell Speechlys LLP and Roger Thomas QC
Jurisdiction
Jersey
Judgment Date
15 June 2021
Procedural Posture
Trust Application / Final Judgment
Outcome
Application granted
Legal Topics
Mistake in Trust Administration, Stamp Duty Land Tax (sdlt), Annual Tax on Enveloped Dwellings (ated), Setting Aside Transactions, Fiduciary Powers, Nominee Arrangements
Trusts Taxation Private International Law Mistake in Trust Administration Stamp Duty Land Tax (sdlt) Annual Tax on Enveloped Dwellings (ated) Setting Aside Transactions Fiduciary Powers +1 more

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Parties

Crestbridge Trustees Limited

First Representor / Trustee

Avocado Limited

Second Representor / Company

A

Beneficiary

B Limited

Family Office

Payne Hicks Beach

Legal Adviser

Charles Russell Speechlys LLP and Roger Thomas QC

Legal Adviser (2021 Opinion)

Procedural Posture

Trust Application / Final Judgment

Legal Issues

  1. 1 Whether the Trustee's exercise of power to procure the Company to hold property as nominee should be set aside due to mistake as to tax consequences
  2. 2 Whether the Trustee failed to take into account relevant considerations under Article 47H
  3. 3 Whether consequential orders should be made to set aside related documents

Ratio Decidendi

The Trustee made a serious mistake as to the tax consequences of procuring the Company to hold property as nominee, resulting in a substantial SDLT liability. The mistake was sufficiently serious and it is just to set aside the exercise of power and related documents under Articles 47G and 47H. The Trustee failed to take into account relevant considerations due to reliance on incorrect advice.

Court Disposition

Application granted

Orders

  • Exercise of power by Trustee procuring Company to hold property as nominee is avoided and of no effect from time of exercise under Article 47G(2)(b) or Article 47H(2)(b)
  • Nominee Agreement between Trustee and Company is set aside and void from time entered into