High Court Order Success for Litigation Team
Rogers and Norton’s Litigation Team successfully obtain a High Court Order rescinding our clients’ Corporate Trust. Our clients were advised by Financial Advisers to enter what was called an Employee’s Benefit Trust in relation to their property portfolio. The Trust was established as an employee benefit trust – to benefit employees of the Company. However, the Company has only ever had, and only ever intended to have, two employees – our clients.
Our clients had been advised that if they transferred the Shares to the Trust, it would be subject to certain reliefs and other beneficial treatment pursuant to the Inheritance Tax Act 1984, sections 13, 28 and 86, as well as having potential capital gains tax advantages. Our clients were also advised that (a) they had retained control of the Shares, in the sense that they were able to apply the Shares for their own benefit; and (ii) they did not as trustees of the Trust owe any duty to any third person. Our clients were advised that the Trust represented an established acceptable means of accessing tax reliefs for themselves and their businesses.
On receiving further advice, it was clear that the Trust was unlikely to qualify for any inheritance tax relief and that there was the possibility of having incurred an inheritance tax charge on the contribution of the Shares to the Trust, as well as various capital gains tax consequences that had not been anticipated.
We were instructed to apply to the High Court to rescind the Employee Benefit Trust and the grounds included that the Inheritance Tax Act 1984, section 13, 28 and 86 could not and did not apply to the Trust.
It was our case that the Trust did not qualify for relief as an employee benefit trust, and that it should be set aside on the grounds of mistake. The remedy sought was the rescission of the transfer of the Shares with retrospective effect to its date of execution. The High Court agreed.
Director Peter Hastings comments “This was a very complicated and technical claim. Our clients were absolutely delighted and relieved with the Rescission Order so that they can now look to try recover from the consequences of the Trust and the Advice that they received.” Peter was supported by Chloe Tooley and Maria Taylor.
For more information, please visit our Commercial Litigation and Dispute Resolution webpage, or to arrange an appointment please contact us on 01603 666001 or by emailing peter.hastings@rogers-norton.co.uk