Trusts and the Fundamental Freedoms – The Exit Tax Regime in Trustees of the P Panayi (Case C-646/15)

In Trustees of the P Panayi Accumulation & Maintenance Settlements (Case C-646/15), the ECJ was confronted with the issue of whether or not a trust can claim the protection of the fundamental freedoms in the internal market. The underlying problem related to the compatibility of the UK exit tax regime with the fundamental freedoms. The ECJ confirmed its position that exit taxes are allowed in the internal market, but their immediate collection is disproportionate. The case, however, raises a number of issues regarding the scope of the freedom of establishment and the relationship between this case and previous ECJ case law, which this article addresses.