Supreme Court—EU free movement of capital principle applies to transfers between UK and Jersey (Routier and another v Revenue and Customs Commissioners)

Table of contents

• What are the practical implications of the judgment?
• What was the background?
• What did the Supreme Court decide?

Article summary

Private Client analysis: Conrad McDonnell, barrister at Gray’s Inn Tax Chambers, examines the Supreme Court’s decision in Routier v HMRC that a testatrix's gift, which included substantial UK assets, to a charitable trust in Jersey qualified for relief from inheritance tax under section 23 of the Inheritance Tax Act 1984 (IHTA 1984). The court held that Jersey was a third country, within the meaning of the Treaty Establishing the European Community (EC Treaty), for the purpose of a transfer of capital from the UK, so the principle of free movement of capital provided for by Article 56 EC Treaty applied. Therefore, HMRC was not entitled to apply a different treatment to a gift to a charitable trust in Jersey, compared with the position for a trust governed by the law of a part of the UK.