A Risky Business

The recent case in June this year of Re Q [2021] JRC 166 has provided useful guidance as to the Royal Court's approach in relation to applications to set aside a trust on the grounds of mistake, where it is acknowledged that the relevant person was aware of some risk of adverse tax consequences.

Nature of application

The application in Re Q was made by the Settlor of the Trusts for the Trusts themselves to be set aside and declared void ab initio on the grounds of his mistaken belief as to the tax consequences. The Settlor established the Trusts by settling nominal amounts (HK$10) into each Trust and subsequently transferring significant amounts (£20m in total) into them.

The Court indicated that the Court's jurisdiction under the Trusts (Jersey) Law 1984 ("the Law") was engaged in two ways in relation to such applications;