Jurisdiction(s):
United Kingdom

Representation of Dominion Fiduciary Trust Ltd re The F Trust: Article 47E Jersey relief setting aside trust for mistake over UK IHT on London property and loan deductibility

Published on: 07 January 2026

Published by a LexisNexis Private Client expert

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Article summary

What was the background?

The Trustee is a trust company incorporated in Jersey, and the Settlor, B, is a national of Country D who has never been UK resident or domiciled. The F Trust is a Jersey discretionary settlement created on 30 March 2017 to hold a high‑value London property already owned by the Settlor, with seven adult beneficiaries (besides the Settlor herself as a beneficiary). The structure was put in place on the advice of English solicitors (HL) as a tax planning step, with the express aim of limiting the Settlor’s liability to UK inheritance tax (IHT) before new rules commenced on 6 April 2017. Before the trust was set up, the Property was owned via a chain of British Virgin Islands companies, with the Settlor as the ultimate beneficial owner, and the shares in those entities were treated as excluded property, outside IHT entirely, while the Settlor remained non‑UK domiciled. Yet amendments to the Inheritance Tax Act 1984 scheduled to take effect on 6 April 2017 meant that interests in ‘close’ companies deriving their value from UK residential property would cease to qualify as excluded property for IHT purposes from then on...

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