Representation of Fiduciary Trust Limited re E Trust [2024] JRC 168 (06 August 2024)

Representation of Fiduciary Trust Limited re E Trust [2024] JRC 168 (06 August 2024)

The statutory test under Article 47E is met: the Settlor and Trustee made a mistake as to the tax consequences of the trust structure, would not have entered into the transaction but for that mistake, and the mistake is of such seriousness that it is just for the court to grant relief. The Declaration of Trust is set aside to the extent that the properties are and always have been held for the Settlor absolutely.

Citation
[2024] JRC 168
Parties
Applicant: Trustee; Applicant: Settlor; Beneficiaries: Minor beneficiaries (children of Settlor and wife); Interested Party: Settlor's wife; Interested Party: HMRC; Interested Party: Bank J Safra Sarasin
Jurisdiction
Jersey
Judgment Date
06 August 2024
Procedural Posture
Representation (trusts) / Judgment After Reserved Decision and Receipt of Further Evidence
Outcome
Declaration of Trust set aside as to the properties; properties held for Settlor absolutely; consequential relief granted.
Legal Topics
Mistake in Trust Law, Setting Aside Trust Transactions, Inheritance Tax, Capital Gains Tax, Trustee Powers, Beneficiary Interests
Trusts Taxation Private International Law Mistake in Trust Law Setting Aside Trust Transactions Inheritance Tax Capital Gains Tax Trustee Powers +1 more

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Parties

Trustee

Applicant

Settlor

Applicant

Minor beneficiaries (children of Settlor and wife)

Beneficiaries

Settlor's wife

Interested Party

HMRC

Interested Party

Bank J Safra Sarasin

Interested Party

Procedural Posture

Representation (trusts) / Judgment After Reserved Decision and Receipt of Further Evidence

Legal Issues

  1. 1 Whether the Declaration of Trust dated 3 June 2016 should be set aside due to mistake under Article 47E of the Trust (Jersey) Law 1984
  2. 2 Whether the tax advice received constituted a mistake of sufficient seriousness to justify relief
  3. 3 Whether the beneficiaries' interests and third parties are adequately protected

Ratio Decidendi

The statutory test under Article 47E is met: the Settlor and Trustee made a mistake as to the tax consequences of the trust structure, would not have entered into the transaction but for that mistake, and the mistake is of such seriousness that it is just for the court to grant relief. The Declaration of Trust is set aside to the extent that the properties are and always have been held for the Settlor absolutely.

Court Disposition

Declaration of Trust set aside as to the properties; properties held for Settlor absolutely; consequential relief granted.

Orders

  • June 2016 Declaration of Trust takes effect as an express declaration that the properties are and always have been held on trust for the Settlor absolutely.
  • Shares in the two nominee holding companies are and have always been vested in the Settlor absolutely.