Hastings Bass in Guernsey - M v St Anne’s Trustee’s Limited

On 20 June 2018 the Guernsey Court of Appeal handed down its eagerly anticipated judgment in M v St Anne’s Trustees Limited. In so doing it clarified the legal test in Guernsey for the exercise of the Court’s discretion under the Hastings Bass principle. Prior to the judgment the law in Guernsey as to the precise legal test to be applied and the exact circumstances in which fiduciaries could seek to avoid transactions giving rise to adverse fiscal charges had been uncertain. This much needed clarification will assist professional advisors and their clients in determining the circumstances in which an application for Hastings Bass relief may be made before significant costs are incurred.

In summary, the Court of Appeal decided to exercise its discretion in favour of setting aside (avoiding) a decision of the trustee to acquire shares in two property holding companies (and other associated transactions) in satisfaction of loans owing by the principal beneficiary. The trustee’s decision had given rise to significant adverse UK tax charges for the Appellant. The Court of Appeal proceeded on the basis that the operation of the Hastings Bass principle should be in accordance with the revised approach set out by the UK Supreme Court in Pitt v Holt.


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