Routier and Another v Revenue and Customs: ChD 18 Sep 2014

Executors appealed against rejection of their claim that a gift in the will qualified for relief against Inheritance Tax as being a charitable gift. The Trusts concerned assets in Jersey.
Held: The appeal failed: ‘The expression ‘held on trust for charitable purposes’ in section 23(6) requires not only that the charitable purposes be UK law charitable purposes but that the relevant trust be subject to the jurisdiction of the United Kingdom courts as well.’
The reasoning of the Court of Appeal in Dreyfus applies to the wording of section 23 of the IHTA. The Coulter Trust did not qualify for exemption under either limb of subsection (6) because it was not governed by United Kingdom law but by Jersey law: ‘The Appellants have not put forward any good reason why Parliament should have intended that the second limb of section 23 should be so much broader than the first, encompassing trusts governed by foreign law but limited to charitable bodies established under UK law. Another important plank in the reasoning of the Court in Dreyfus was that the distinction drawn between the first limb of section 37 (namely income of any body of persons or trust established for charitable purposes) and the second limb of section 37 (namely income which according to the rule established by deed of trust or will are applicable to charitable purposes only) was intended only to distinguish between income held by bodies which are exclusively charitable on the one hand and bodies which are not exclusively charitable but which hold the relevant income for exclusively charitable purposes on the other. It was not intended to be a difference beyond that, allowing a much wider geographic range of bodies to fall within the second limb than could fall within the first. ‘


Rose DBE J


[2014] EWHC 3010 (Ch), [2014] BTC 42, [2014] WLR(D) 449, [2014] STI 2931, [2015] STC 451, [2015] PTSR 60, [2014] WTLR 1717


Bailii, WLRD


Inheritance Tax Act 1984 23


England and Wales


CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners CA 1954
The Court considered whether it had jurisdiction to make an order with respect to a company registered in New York for objects which were charitable according to the laws of England.
Held: The Revenue’s appeal against a finding that the . .
CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners HL 1956
The company was a foreign corporation constituted according to the laws of the state of New York for objects which were exclusively charitable according to the law of the United Kingdom.
Held: The term ‘charity’ does not include an institution . .
CitedHM Inspector of Taxes v Dextra Accessories Ltd HL 7-Jul-2005
The taxpayer companies had paid funds into a trust for employees. They sought to set off the payments against their liability to corporation tax. The revenue argued that they were deductible only in the year in which they were paid to the employees. . .

Cited by:

At ChDRoutier and Another v Revenue and Customs CA 16-Sep-2016
Executors appealed against a decision that a residual gift in a will was not charitable and that it was therefore subject to Inheritance Tax arguing that the section if construed in this way was an unlawful restriction on the free movement of . .
At ChDRoutier and Another v Revenue and Customs SC 16-Oct-2019
A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity

Updated: 19 April 2022; Ref: scu.536733