A recent case before the Jersey Royal Court has raised the possibility that tax avoidance may play an increasing part in deciding future trust rectification applications.
A recent case before the Jersey Royal Court has raised the possibility that tax avoidance may play an increasing part in deciding future trust rectification applications.
In IFM Corporate Trustees Limited v Helliwell and Mountain, which involved an application to rectify an employee benefit trust notifiable to HMRC under the UK’s DOTAS rules, the court observed it was ‘open to argument’ that a court should not exercise judicial discretion to rectify a mistake ‘if on the facts of a particular case, the scheme in question is lawful but appears to be so contrived and artificial that it leaves the Court with distaste if, in effect, it is required to endorse it’.
The Jersey Royal Court has remarked that future decisions involving ‘full and frank disclosure’ in trust applications might have to consider whether a trust was part of an aggressive tax avoidance scheme.
Although the trust in this case was not an aggressive tax avoidance scheme, the Society of Trust and Estate Practitioners (STEP) quotes Jersey law firm Collas Crill in saying that the Court’s comments indicate a change in the attitude of the Jersey judiciary: ‘... the increasing global focus on tax payment, avoidance and evasion mean that the day the Jersey Court has to decide and adopt its stance may be approaching’.
A recent case before the Jersey Royal Court has raised the possibility that tax avoidance may play an increasing part in deciding future trust rectification applications.
A recent case before the Jersey Royal Court has raised the possibility that tax avoidance may play an increasing part in deciding future trust rectification applications.
In IFM Corporate Trustees Limited v Helliwell and Mountain, which involved an application to rectify an employee benefit trust notifiable to HMRC under the UK’s DOTAS rules, the court observed it was ‘open to argument’ that a court should not exercise judicial discretion to rectify a mistake ‘if on the facts of a particular case, the scheme in question is lawful but appears to be so contrived and artificial that it leaves the Court with distaste if, in effect, it is required to endorse it’.
The Jersey Royal Court has remarked that future decisions involving ‘full and frank disclosure’ in trust applications might have to consider whether a trust was part of an aggressive tax avoidance scheme.
Although the trust in this case was not an aggressive tax avoidance scheme, the Society of Trust and Estate Practitioners (STEP) quotes Jersey law firm Collas Crill in saying that the Court’s comments indicate a change in the attitude of the Jersey judiciary: ‘... the increasing global focus on tax payment, avoidance and evasion mean that the day the Jersey Court has to decide and adopt its stance may be approaching’.
