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Make no mistake
Key points
- Complex UK tax rules mean that once a trust deed has been executed amendments cannot readily be made.
- It is not uncommon to find that a mistake within a trust deed creates an unexpected tax liability.
- Generally there are two possible remedies to correct mistakes within a trust deed – rectification and recission. Both are granted at the discretion of the court.
- For many years the principle in Hastings-Bass governed how the courts dealt with trust deed errors.
- Pitt v Holt in 2011 caused the courts to re-consider the test reducing the ease with which trustees could invite the court to correct tax mistakes.
The use of trust structures requires an understanding of increasingly complex UK tax rules. Once a trust deed has been executed amendments cannot readily be made and it is not uncommon to find that a mistake within...
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