There's something for both trust litigators and non-contentious practitioners in this recent judgment from Jersey's Royal Court, issued on 10 November ( JRC 191). Principally concerned with an application under Articles 47G and 47H of the Trusts (Jersey) Law 1984, Commissioner Clyde-Smith was also asked to deal with a potential failure by the trustee to obtain protector consent.
At just over ten pages, the judgment is a short one and the facts are set out simply there for those with the inclination to read it. But putting it more brusquely for readers pushed for time:
- Mr C had the benefit of a life interest in what was otherwise a discretionary trust;
- the trustee, having checked there were no adverse tax consequences, then varied the trust by appointing it onto a joint life interest for Mr C and his wife, Mrs C; and
- it turned out that the tax advice was wrong, leading to multiple instances of liability to UK inheritance tax.
On realising the true tax significance of the joint life interest appointment, the trustee applied to the Royal Court for relief, drawing on the law of mistake and the principle known as the rule in Re Hastings Bass. In doing so, the trustee was supported by all the adult beneficiaries and by the advocate representing the unborn beneficiaries. HMRC was notified of the application but did not respond.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.