In the matter of W Trust and X Trust

Advocate Michael Christopher Goulborn representing minor and unborn beneficiaries

Shortly after the W Trust was constituted, the First Representor transferred to his mother the Second Representor some shares in E, with the intention that she would then settle those shares into the W Trust. His mother accepted the shares on that basis and did indeed so settle the shares. E is a profitable property investment company which has increased in value over the years.

The arrangements for setting up the W Trust, the transfer of shares in E and the setting up of the X Trust were all motivated by the hope of tax advantages in the United Kingdom where the First Representor has at all material times been domiciled and resident.

In summary, the arrangement has not only not achieved its purpose but even worse what was done has created tax liabilities where none previously existed. In those circumstances, the First Representor not unnaturally contends that he would never have made these arrangements had he been properly advised of what the fiscal consequences would be, and as he put it in his affidavit, the offshore structure which he had adopted "as a result of the flawed tax advice has resulted in the accrual of significant tax charges which threaten my livelihood and that of my family."

Against that background, we assess the application for the W Trust and the transfer of the E shares to be set aside.