Representation of B and C re the N Foundation and the M Trust [2023] JRC 166 (15 September 2023)

Representation of B and C re the N Foundation and the M Trust [2023] JRC 166 (15 September 2023)

The court found that B and C made operative mistakes as to the tax consequences of the structures, relied entirely on incorrect professional advice, and would not have entered into the transactions but for those mistakes. The mistakes were sufficiently serious to render it unjust for the Foundation and Trust to retain the property. The endowments to the Foundation and subsequent transfers to the Trust were set aside ab initio.

Citation
[2023] JRC 166
Parties
Applicant: B; Applicant: C; Respondent: N Foundation; Respondent: M Trust; Interested Party: Intertrust; Notified Party: HMRC
Jurisdiction
Jersey
Judgment Date
15 September 2023
Procedural Posture
Representation (application for Declarations and Consequential Relief) / Judgment on Application to Set Aside Dispositions and Trust for Mistake
Outcome
Application granted. Dispositions to the Foundation and Trust set aside ab initio.
Legal Topics
Mistake in Voluntary Dispositions, Setting Aside Trusts and Foundations, Inheritance Tax (iht) Planning, Jersey Law on Trusts and Foundations, Professional Negligence in Tax Advice
Trusts and Estates Tax Law Private International Law Mistake in Voluntary Dispositions Setting Aside Trusts and Foundations Inheritance Tax (iht) Planning Jersey Law on Trusts and Foundations Professional Negligence in Tax Advice

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Parties

B

Applicant

C

Applicant

N Foundation

Respondent

M Trust

Respondent

Intertrust

Interested Party

HMRC

Notified Party

Procedural Posture

Representation (application for Declarations and Consequential Relief) / Judgment on Application to Set Aside Dispositions and Trust for Mistake

Legal Issues

  1. 1 Whether dispositions to the N Foundation and M Trust are void or voidable for mistake as to tax consequences
  2. 2 Whether the Trust itself should be set aside for mistake
  3. 3 Whether the mistakes were operative and sufficiently serious to justify relief

Ratio Decidendi

The court found that B and C made operative mistakes as to the tax consequences of the structures, relied entirely on incorrect professional advice, and would not have entered into the transactions but for those mistakes. The mistakes were sufficiently serious to render it unjust for the Foundation and Trust to retain the property. The endowments to the Foundation and subsequent transfers to the Trust were set aside ab initio.

Court Disposition

Application granted. Dispositions to the Foundation and Trust set aside ab initio.

Orders

  • Endowments made into the N Foundation set aside and declared void ab initio and of no effect.
  • Assets transferred to the Foundation held on bare trust for B at all material times.