Moffat -v- Apex Trust Company Limited [2014] JRC 252 (18 December 2014)

Moffat -v- Apex Trust Company Limited [2014] JRC 252 (18 December 2014)

The trust and associated EAPDs were set aside because the Representors acted under a fundamental mistake as to the inheritance tax consequences, which was sufficiently serious to render it unjust for the property to remain in the trust. The impossibility of annuity payments did not independently satisfy the 'but for' test, but the tax mistake did.

Citation
[2014] JRC 252
Parties
Applicant: Representors; Respondent: Apex Trustees Limited; Former Trustee: Atlas; Former Trustee: Nautilus Trustees Limited; Former Enforcer: Enhance
Jurisdiction
Jersey
Judgment Date
18 December 2014
Procedural Posture
Trust Law Application / Judgment
Outcome
Trust and EAPDs declared invalid; assets held on bare trust for Representors.
Legal Topics
Mistake in Trust Creation, Tax Avoidance Schemes, Invalidity of Trust Instruments, Jersey Trust Law, Inheritance Tax Consequences
Trusts Taxation Private International Law Mistake in Trust Creation Tax Avoidance Schemes Invalidity of Trust Instruments Jersey Trust Law Inheritance Tax Consequences

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Parties

Representors

Applicant

Apex Trustees Limited

Respondent

Atlas

Former Trustee

Nautilus Trustees Limited

Former Trustee

Enhance

Former Enforcer

Procedural Posture

Trust Law Application / Judgment

Legal Issues

  1. 1 Whether the trust and associated documents are invalid due to mistake as to tax consequences and impossibility of performance
  2. 2 Whether the mistake was sufficiently serious to justify setting aside the trust

Ratio Decidendi

The trust and associated EAPDs were set aside because the Representors acted under a fundamental mistake as to the inheritance tax consequences, which was sufficiently serious to render it unjust for the property to remain in the trust. The impossibility of annuity payments did not independently satisfy the 'but for' test, but the tax mistake did.

Court Disposition

Trust and EAPDs declared invalid; assets held on bare trust for Representors.

Orders

  • Trust and EAPDs set aside as invalid.
  • Assets to be held by Apex on bare trust for the Representors.