Routier & Anor v Revenue And Customs
2014
CHANCERY DIVISION
United Kingdom
CORAM
- MRS JUSTICE ROSE DBE
Areas of Law
- Probate and Succession
- Tax Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
This case involved whether the residue of Beryl Coulter’s estate left to the Coulter Trust was exempt from inheritance tax under the IHTA 1984. The trust's purposes were charitable under UK law, but it was governed by Jersey law. The court held that the trust did not qualify for the exemption, as Section 23(6) of the IHTA 1984 requires the trust to be subject to UK jurisdiction as well as having UK law charitable purposes.
Judgment
MRS JUSTICE ROSE DBE:
This appeal raises the question whether the disposition in the will of the late Beryl Coulter is exempt from inheritance tax because it comprises property which is given to charities within the meaning of section 23 of the Inheritance Tax Act 1984 (‘the IHTA’). The appeal is brought by the Appellants who are the executors of Mrs Coulter’s will. They challenge the notices of determination given by the Respondents (‘HMRC’) on 29 May 2013 determining that relief under section 23 is not available. I gave permission for the appeal to be brought in the High Court rather than before the First-tier Tribunal by order dated 19 November 2013, pursuant to section 222(3)(b) of the IHTA . The liability to tax if HMRC are correct in their assessment that the disposition is not exempt is for a sum between £591,724 and £633,571 – there is some difficulty in determining this more precisely but that is not relevant to this dispute.
Mrs Coulter died on 9 October 2007 and was domiciled in Jersey at the date of her death. Her will is dated 1 October 2004. Probate was granted in the Probate Division of the Royal Court of Jersey on 25 October 2007. In her will Mrs Coulter left a number of legacies to various people (totalling £210,000). As to the residue, the will provides that it is to given to her executors to be held on trusts (referred to as the Coulter Trust):
‘To accumulate the income of the Coulter Trust and to distribute the Coulter Trust together with any accumulated income therefrom UNTO such incorporated body as may be set up by the Parish of St Ouen for the purpose of the provision of homes for the elderly of the Parish (hereinafter known as “the Incorporated Body”).’
The will set out express conditions to which the trust was subject, including a condition that the money must not be used for buying the land because the provision of the land by the Incorporated Body or the Parish of St Ouen in Jersey (‘the Parish’) was a precondition to the release of any funds.
Clause 3 of the will provided a gift in default:
‘3. In the event that the Parish of St Ouen fails neglects or refuses to set up an incorporated body as set out above within three years of my decease, or fails or refuses to accept any of the conditions of my gift as set out above then in either of these events I DIRECT that my Trustees shall in place of the Incorporated Body, hold the Coulter Trust and distribute the same both as to income as capital UNTO JERSEY HOSPICE CAR