Relief for Mistake - How Innovative will the Jersey Court be?

In its latest consideration of an application to rectify a mistake made in relation to a Jersey discretionary trust, the Royal Court declined to use the "innovative powers" afforded to it under Article 47E of the Trusts (Jersey) Law 1984 (as amended) (the Trusts Law) so as to take positive steps to give effect to past intention of the economic settlor.

In the Matter of the B Trust [2019] JRC035, concerned a representation brought by the economic settlor of a Jersey law trust (the Trust), seeking relief in relation to mistakes that he had made in establishing the Trust as a result of his misunderstanding as to:-
1. The true nature and effect of establishing a Jersey law trust; and
2. The UK inheritance tax (IHT) treatment of the Trust.

The Representor submitted that but for these two categories of mistake, he would not have settled assets into the Trust, nor would he have continued to make dispositions into the Trust. The Court accepted the Representor's evidence and set aside the transfers of assets, but would not make positive orders beyond that.

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Nigel SandersPartnerT +44 (0) 1534 700
Fritha FordSenior AssociateT +44 (0) 1534 700