An English Court of Appeal ruling that UK assets left to a
Jersey trust are subject to inheritance tax should prompt Islanders
to keep their assets here and not in the UK, says Ogier's Steve
The court has backed HMRC in a decision over the estate of a
Jersey-domiciled woman, Beryl Coulter, who died in 2007 with UK
assets worth £1.8 million.
Her will left those assets for the construction of homes for the
elderly in the Island or to Jersey Hospice Care but HMRC challenged
Mrs Coulter's executors' claim of charitable relief from UK
inheritance tax, saying it did not apply to gifts to charitable
trusts outside of the UK.
The case originally went to court in 2015, and HMRC's view
was upheld. The Court of Appeal has now also backed that view
– meaning that £600,000 from the £1.8 million UK
estate must go to the taxman.
A remaining legal argument about whether that position
constitutes an unlawful restriction on the free movement of capital
between EU member states (such as the UK) and third countries (such
as Jersey) has been held over, with both parties ordered to prepare
full arguments before returning to the Court of Appeal.
Steve, Ogier's Global Senior Partner who has more than 20
years' experience in the trusts industry, said that the
argument about free movement of capital was one that would be
closely watched by the local industry and by Jersey's
government – but that the key message from the case was that
Islanders should consider moving their assets from the UK, even if
their will seeks to leave them to a Jersey charity.
He said: "At first glance, and whilst the Court of Appeal
has reached its decision based upon its analysis of the relevant
cases and English statutes, the upshot of the decision is that one
third of the trust fund (£600,000) will not now go towards
the worthy project of providing homes for elderly residents in St
"This seems to me to be regrettable.
"The further and perhaps more significant question of
whether Jersey is a third country under Article 63 of the EU
treaties which is relevant for the question of free movement of
capital would appear still to be decided.
"No doubt Jersey`s government will watch this with
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The personal representatives, who are responsible for administering the estate of someone who has died, generally require a Grant of Representation to allow them to collect in, sell and distribute the deceased's assets.
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