In the matter of the B Trust [2019] JRC 035 (03 March 2019)

In the matter of the B Trust [2019] JRC 035 (03 March 2019)

The Court found the Representor made serious mistakes regarding the nature of the trust and its tax consequences, satisfying Article 47E. The transfers into the Trust are voidable and of no effect from the dates made. Relief is granted, but the Court will not direct property to the Representor's wife for tax efficiency, nor set aside the initial trust fund due to lack of evidence of mistake by Lincoln.

Citation
[2019] JRC 035
Parties
Applicant: Representor; Trustee: Respondent; Former Trustee: Lincoln Trust Company (Jersey) Limited; Interested Party: Her Majesty's Revenue and Customs
Jurisdiction
Jersey
Judgment Date
03 March 2019
Procedural Posture
Representation (trust Law) / Final Judgment
Outcome
Transfers into the Trust by the Representor declared voidable and of no effect from the dates made; ancillary orders granted.
Legal Topics
Mistake in Trust Formation, Inheritance Tax, Domicile, Disposition of Trust Property, Relief for Mistake
Trusts Taxation Private International Law Mistake in Trust Formation Inheritance Tax Domicile Disposition of Trust Property Relief for Mistake

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Parties

Representor

Applicant

Respondent

Trustee

Lincoln Trust Company (Jersey) Limited

Former Trustee

Her Majesty's Revenue and Customs

Interested Party

Procedural Posture

Representation (trust Law) / Final Judgment

Legal Issues

  1. 1 Whether transfers into trust are voidable for mistake under Article 47E of Trusts (Jersey) Law 1984
  2. 2 Whether the trust itself is invalid under Article 11 due to mistake
  3. 3 Whether relief should be granted for tax-related mistakes

Ratio Decidendi

The Court found the Representor made serious mistakes regarding the nature of the trust and its tax consequences, satisfying Article 47E. The transfers into the Trust are voidable and of no effect from the dates made. Relief is granted, but the Court will not direct property to the Representor's wife for tax efficiency, nor set aside the initial trust fund due to lack of evidence of mistake by Lincoln.

Court Disposition

Transfers into the Trust by the Representor declared voidable and of no effect from the dates made; ancillary orders granted.

Orders

  • Respondent holds sums upon trust for the Representor absolutely, subject to ancillary orders.
  • Capital distribution to child E in January 2010 validated and not subject to repayment.