In Gresh v RBC Trust Company (Guernsey) Ltd and HMRC (judgment 6/2016) Guernsey’s Royal Court would not allow trustees to set aside a decision that caused a beneficiary an unexpected tax charge on his pension lump sum.
- A pension fund was managed by a Guernsey trust and it’s independent tax adviser had advised that it could make a payment of lump sum tax free to its beneficiary provided that the sum was not remitted to the UK.
- That advice proved incorrect and Mr Gresh paid tax at 40%.
He made an application to the court to set aside the trustees’ decision and rectify their mistake on Hastings-Bass principles.
The Court considered Pitt v Holt however it rejected the appeal as it appeared that the adviser’s professional indemnity advisers would settle the tax paid and so it was not unconscionable to leave the mistake uncorrected.
Gresh v RBC Trust Company (Guernsey) Ltd and HMRC (judgment 6/2016)