Ogden v Trustees of RHS Griffiths 2003 Settlement (2008)

• Discretionary trust dispositions to avoid substantial inheritance tax

• How far will equity go to help in situations where a mistake of fact is made at the time the disposition is made?

• Will the courts set aside transfers on this basis?

Case Facts

• 8th April 2003-Ronald Griffiths created 2 tax exempt transfers-(made more than 7 years before death )

• Made another in Feb 2004- the largest, at £2.6m

• Autumn 2004- diagnosed with lung cancer- dies 17 April 2005

• Since he had not survived more than three years the three transfers were subject to full tax of £1m+

The Claimants’ Grounds(HMRC not represented)

• The claimants (executors of will) sought to set aside transfers on ground that they were made under a mistake- equity will set aside a voluntary transfer in such circumstances.

• Cited Ogilvey v Littleboy- a donor can obtain back property by showing he made a serious mistake rendering the gift unjust

The Decision

• ‘As Mr Griffiths made no mistake about his state of health in April 03, the two transactions in this month cannot be set aside’

• By 2004 the court was satisfied he was suffering from lung cancer although unaware of it. Held: he would have acted differently with this knowledge- transfer set aside.

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