Please, Sir, May I pay more tax?

In the recent case of In the matter of the May Trust [2021] JRC 137, the Royal Court of Jersey (“the court”) authorised a trustee to advance approximately half the trust fund (£75 million) to a discretionary beneficiary so that he could personally donate the funds to an English charitable foundation which was itself a beneficiary of the trust. The advancement was proposed with the express intention of enabling the beneficiary to elect to do what he (and the other adult beneficiaries) considered a broader social benefit by paying tax to HMRC at an effective rate of 25 per cent. In doing so, the court departed from English case law, which would arguably have limited the advancement to the extent of the moral obligation in question (ie the extent to which the beneficiary would otherwise have been able to meet the obligation out of his own assets), by determining that the obligation existed and was valid as long as it was recognised by a beneficiary.