The Supreme Court has ruled that a gift by will to a charitable trust subject to the law of Jersey is exempt from inheritance tax.

Representing executors of the will in question, UK law firm Irwin Mitchell brought the Routier & Venables v HMRC challenge to the Supreme Court after the Court of Appeal had ruled that a restriction to UK charities was justified by the need for “effective fiscal supervision”, because, at the time, there was no agreement for mutual assistance between the UK and Jersey.

HMRC’s interpretation was based on a case called “Dreyfus” which came before the Supreme Court’s predecessor,...