Bhaur and others v Equity First Trustees (Nevis) Ltd and others, Court of Appeal, 18 May 2023
The claimants a married couple who ran a property partnership entered into an avoidance scheme under which broadly they transferred the business to an offshore employee benefit trust. The intention was that when they died their sons would benefit from the trust free of inheritance tax. After a challenge from HMRC the scheme was found to be ineffective so the claimants applied to the High Court for the transfer to be set aside on the grounds of mistake.
The High Court dismissed the claim saying there was no mistake. The couple knew they were buying into an avoidance scheme but mispredicted the consequences. The claimants appealed.
Upholding the High Court’s decision the Court of Appeal said the distinction between a mistake and a misprediction could become blurred. However here the claimants knew there was a possibility that the scheme...
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