In the matter of the A Family Trust [2017] JRC 014 (17 January 2017)

In the matter of the A Family Trust [2017] JRC 014 (17 January 2017)

The representors made a fundamental mistake as to the situs and tax consequences of the assets transferred into the Trust. The mistake was so serious that it would be unjust for the Trustee to retain the UK assets. The transfers were therefore set aside under Article 47E of the Trusts (Jersey) Law 1984.

Citation
[2017] JRC 014
Parties
Applicant: Representors; Respondent: B (the Trustee); Interested Party: HMRC
Jurisdiction
Jersey
Judgment Date
17 January 2017
Procedural Posture
Trust Law Application / Judgment After Application to Set Aside Asset Transfers
Outcome
Application granted; transfers of UK assets into the Trust set aside.
Legal Topics
Mistake in Trust Settlements, Inheritance Tax Liability, Setting Aside Dispositions Under Jersey Law
Trusts Taxation Private International Law Mistake in Trust Settlements Inheritance Tax Liability Setting Aside Dispositions Under Jersey Law

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Parties

Representors

Applicant

B (the Trustee)

Respondent

HMRC

Interested Party

Procedural Posture

Trust Law Application / Judgment After Application to Set Aside Asset Transfers

Legal Issues

  1. 1 Whether the transfer of UK situs assets into the Trust should be set aside for mistake under Article 47E of the Trusts (Jersey) Law 1984
  2. 2 Whether the mistake as to the situs and tax consequences of the assets was sufficiently serious

Ratio Decidendi

The representors made a fundamental mistake as to the situs and tax consequences of the assets transferred into the Trust. The mistake was so serious that it would be unjust for the Trustee to retain the UK assets. The transfers were therefore set aside under Article 47E of the Trusts (Jersey) Law 1984.

Court Disposition

Application granted; transfers of UK assets into the Trust set aside.

Orders

  • Disposition of UK assets by the representors into the Trust is set aside.
  • Trustee to transfer back to the representors assets equivalent in value to the UK assets originally settled, including as many UK assets as possible.