The Royal Court of Jersey has issued its judgment in Representation of AB and Church Street Trustees Limited re E Trust [2026] JRC 171, demonstrating the scope of Jersey’s statutory mistake framework under Article 47E of the Trusts (Jersey) Law 1984.
The case involved a settlor couple who executed donation agreements in 2018 to transfer significant assets into a Jersey discretionary trust as part of a routine "tidying-up" exercise. The transfer was executed without targeted UK tax advice, inadvertently exposing the trust structure to an immediate UK inheritance tax (IHT) charge exceeding £500,000.
- Rejection of Pitt v Holt Standard: The Royal Court confirmed that Jersey law does not follow the restrictive English common law distinction between mistakes as to tax consequences versus mistakes as to legal effects. Under Article 47E, if a settlor would not have entered into the transaction "but for" a genuine, fundamental mistake, the Court retains discretion to declare the disposition voidable.
- HMRC Windfall Argument: The Court emphasized that unwinding the transfer did not deprive foreign tax authorities of tax legitimately due on structured wealth; rather, it corrected an unintended tax windfall arising from an honest administrative error.
- Source: Read Comsure's case commentary on the Jersey Royal Court Trust Mistake Relief.
Jersey: Royal Court Unwinds US$15m Trust Transfer Under Statutory Mistake (Re E Trust)