Jurisdiction(s):
United Kingdom

High Court rescission of EBT sub-trust appointments for mistake about IHTA 1984 s86; relevant property charges avoided; HMRC must be party to raise public policy

Published on: 03 January 2025

Published by a LexisNexis Tax expert

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Article summary

JTC Employer Solutions Trustee Ltd v Garnett and another [2024] EWHC 3128 (Ch)

JTC Employer Solutions Trustee Ltd served as trustee to two arrangements: the 2005 Henderson Family Benefit Trust and the 2011 Henderson Group plc Employer‑Financed Retirement Scheme. Both trusts were intended to deliver benefits to employees, ex‑employees and their families. The defendants, Mr Garnett and Mr Sekhon, appeared as representative beneficiaries and raised no objection to the relief the claimants pursued. The claimants asked the court to rescind a number of deeds establishing sub‑trusts for named beneficiaries and their relatives. Their rationale was that, under section 86(1) of the Inheritance Tax Act 1984 (IHTA 1984), employee benefit trusts avoid the relevant property regime only where the beneficiary class comprises ‘all or most’ employees or office‑holders (see IHTA 1984, s 86(3)(a)). HMRC’s position was that the exemption was inapplicable because the sub‑trust beneficiary classes did not meet it (as set out at IHTM42970). The relevant property regime (IHTA...

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