A charitable gift to a trust was not eligible for inheritance tax exemption, on the grounds that the trust was established under and governed by Jersey law, as opposed to being governed by UK law and subject to the jurisdiction of the UK courts.
The deceased’s will provided for a charitable gift to a trust. The trust was established under and governed by Jersey law. HM Revenue and Customs considered that the gift to the trust did not fall within the inheritance tax exemption for gifts to charities (IHTA 1984, s 23), on the basis that as the trust was governed by Jersey law, it did not qualify as a ‘trust for charitable purposes only’ (within s 23(6)).
The High Court ([2014] EWHC 3010 (Ch)) dismissed the appellants’ appeal. It concluded that the expression ‘held on trust for charitable purposes’ in s 23(6) requires not only that the charitable purposes be UK law charitable purposes, but
