Andrew White
Posted on 21 Oct 2019

Case update: Routier v HMRC

Average read time: 1.5 minutes. 

The Supreme Court has given its widely anticipated judgment in the case of Routier v HMRC.

The case concerned a gift of UK property under a will to a charitable trust which was at the relevant time governed by Jersey law.

HMRC argued that, under UK law, the gift was not exempt from inheritance tax. This was principally because the charity itself was governed by Jersey law (as opposed to UK law) when the gift was made. Had the gift been made to a UK charity governed by UK law then it would in the normal course have been exempt from inheritance tax. The amount of inheritance tax at stake was approximately £567,000.

The taxpayer's argument was that the position under UK law was in breach of EU law because it restricted the free movement of capital between EU member states and "third countries" (the UK being the relevant member state and Jersey being a territory regarded as a "third country" for these purposes).

The question for the court was, broadly, whether the position under UK law (i.e. that inheritance tax was payable) was inconsistent with EU law (which would take priority).

The Supreme Court sided with the taxpayer and it was held that the UK legal position was inconsistent with EU law. No inheritance tax was payable on this basis.


This judgment is a significant development with potential implications in respect of gifts to charities not just in Jersey but also Guernsey and other territories regarded as "third countries" under EU law. It remains to be seen how Brexit may affect the outcome in future and this is to be kept under review.  

If you think this case may be relevant to your circumstances and you have any questions or would like to discuss this, please contact Andrew White by emailing or calling 020 7788 6324.