In the case of Mackay v Wesley , a woman whose father made her trustee of a family trust that embarked on a 'round the world' capital gains tax (CGT) avoidance scheme involving an Isle of Man trust has failed to persuade the High Court to rescind the appointment. The result was that Nicola Mackay, her father, and a firm of solicitors they used, were jointly and severally liable for a net CGT tax charge of £1.6 million. Only Nicola Mackay has any substantial assets and virtually the whole burden of the liability will fall to her. The CGT charge is subject to challenge at the FTT; but, in the meantime Nicola Mackay is seeking to have her appointment as trustee nullified on the grounds of her father's undue influence even though she signed four deeds indicating her acceptance of the appointment at the time.
Although the judge accepted that Mackay had placed trust and confidence in her father in relation to the management of her financial affairs, he decided that her claim was undermined by her failure to disclaim the appointment when she signed the deeds. As such, he refused to rescind her appointment as trustee.