In In the matter of the M Trust [2017] JRC 198 | Jersey Law

In In the matter of the M Trust [2017] JRC 198, the Royal Court was asked to set aside the transfer of assets into a Jersey discretionary trust on the ground of mistake pursuant to Articles 11 and/or 47E of the Trusts (Jersey) Law 1984 (“TJL”).

The representor was the settlor (and sole discretionary beneficiary), who before setting up the trust, took advice from a UK tax adviser. The advice included the suggestion that due to the settlor’s non-UK domicile and the international nature of his work, he would benefit from setting up a trust in Jersey to hold certain assets. The settlor relied on this advice and accordingly, set up a Jersey trust.

A few years later and upon taking tax advice from a different tax advisor, it became apparent that the first adviser had failed to advise the settlor that as a deemed UK domiciliary, setting up a Jersey trust and in doing so, transferring the assets to the trustee, would incur a substantial UK tax liability.

Due to this, the settlor made an application to the Royal Court on the ground of mistake under both Articles 11 and/or 47E of the TJL.


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