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Alan Blackburn, Alan Blackburn Sports Limited v. Commssioners for HM Revenue and Customs - Chancery Divison - 19 February 2008
Patrick Way appeared for the Appellants
Full Transcript
P J Underwood v Commissioners for HM Revenue and Customs - Chancery Division - 31 January 2008
Patrick C Soares and Hui Ling McCarthy appeared for the Appellant
Full Transcript
Commissioners for HM Revenue and Customs v Weald Leasing Limited - Chancery Division - 16 January 2008
Michael Conlon QC and Nicola Shaw appeared for the Respondent
Full Transcript
Robert Gaines-Cooper v Commisioners for HM Revenue and Customs - Chancery Division - 13 November 2007
Michael Flesch QC and Nicola Shaw appeared for the Appellant
Full Transcript
Commissioners for Her Majesty's Revenue and Customs v Total UK Limited - Court of Appeal - 18 October 2007
John Walters QC and Barrie Akin appeared for the Respondent
Full Transcript
ING Baring Securities (Hong Kong) Limited (formerly known as Baring Securities (Hong Kong) and presently known as Macquarie Securities Limitied) v The Commissioner of Inland Revenue - Court of Final Appeal of the Hong Kong Special Administrative Region - 5 October 2007
David Goy QC appeared for the Appellant
Full Transcript
Martin Ashley v. The Commissioners for Her Majesty's Revenue and Customs - Special Commissioners - 30 August 2007
INCOME TAX – EIS relief – certificate required under section 306(2) TA for claim to be made – certificate for shares issued 31 December 2002 – Did it cover shares issued 5 July 2002? – no – no valid claim made so no relief – appeal dismissed
Patrick Way and Hui Ling McCarthy appeared for the Appellant
Full Transcript
Invicta Foods Limited v The Commissioners for Her Majesty's Revenue and Customs - London Tribunal Centre (Customs) - 13 August 2007
Nicola Shaw appeared for the Appellant
Full Transcript
The Commissioners for Her Majesty's Revenue and Customs v. Household Estate Agents Limited - Chancery Division - 12 July 2007
Nicola Shaw appeared for the Appellant
Full Transcript
Jason Drummond v. The Commissioners for Her Majesty's Revenue and Customs - Special Commissioners - 5 July 2007
CAPITAL GAINS TAX – Computation of gain – Second hand life assurance policy – Surrender proceeds brought into computation of chargeable event gain for income tax – Whether surrender proceeds to be excluded as disposal consideration for CGT purposes – No – TCGA 1992 s37(1)
CAPITAL GAINS TAX – Acquisition consideration – Wholly and exclusively for the acquisition of the asset – Second hand life assurance policies acquired for £210,000 above surrender value as part of tax avoidance scheme – Whether entire consideration incurred for acquisition of the policies or as part of pre-ordained tax avoidance scheme – Whether alternatively the £210,000 was consideration for acquisition of the policies – No – Appeal dismissed – TCGA s.38(1)
Patrick Way and Hui Ling McCarthy appeared for the Appellant
Timothy Brennan QC and Nicola Shaw appeared for the Respondent
Full Transcript
Philip John Underwood v. The Commissioners for Her Majesty's Revenue and Customs - Special Commissioners - 16 May 2007
CAPITAL GAINS TAX – time of disposal - sale of land - Appellant contracted to sell land and on same day purchaser gave Appellant option to re-purchase – before sale to original purchaser completed Appellant exercised option to re-purchase - Appellant then contracted to sell to a company connected with Appellant - only transfer executed by Appellant was transfer to connected company - whether a disposal of land to, and acquisition by, original purchaser – no - if so, whether date of disposal and acquisition of land for purposes of capital gains tax was date of contract to sell to original purchaser as argued by Appellant – no –appeal dismissed – TCGA 1992 s 28
Patrick Soares and Hui Ling McCarthy appeared for the Appellant
Full Transcript
Jayram Chiniah v. Commissioner of Income Tax (Mauritius) - Privy Council - 17 April 2007
Philip Baker QC and Marika Lemos appeared for the Respondent
Full Transcipt
Kalron Foods Limited v. Commissioners for HM Revenue and Customs - Chancery Division - 30 March 2007
Michael Thomas appeared for the Appellant
Full Transcript
Alan Blackburn, Alan Blackburn Sports Limited v. Commssioners for HM Revenue and Customs - Special Commissioners - 28 March 2007
EIS RELIEF – numerous issues of shares – in some cases payments in advance of the application for shares – caught by the value received provisions – in other cases the share register completed before receipt of the money – was a conditional issue of shares pending the receipt of the money
Patrick Way appeared for the Appellant
Full Transcript
Spearmint Rhino Ventures (UK) Limited v. Commissioners for HM Revenue and Customs - Chancery Division - 23 March 2007
David Goy QC and Nicola Shaw appeared for the Respondent
Full Transcript
The Trustees of the F D Fenston Will Trusts v. Commisioners for HM Revenue and Customs
CAPITAL GAINS TAX – Computation of gains – Expenditure – Shares – Capital contributions to Delaware Company – Whether incurred "on the asset" – Yes – Whether reflected in the state or nature of the asset the time of disposal – No – Appeal dismissed – TCGA 1992 s.38(1)(b)
David Goldberg QC and Hui Ling McCarthy appeared for the Appellant
Full Transcript
Irving v. Commissioners for HM Revenue and Customs - Chancery Division - 8 February 2007
David Goy QC and Michael Sherry for the Appellant
Full Transcript
Weald Leasing Limited v Commissioners for the HM Revenue and Customs - VAT Tribunal - 7 February 2007
VAT – AVOIDANCE – Abuse of rights – Appellant associate of exempt trader purchasing assets to lease to separate company to lease on to exempt trader – Associate outside VAT group – Associate credited with input tax on purchases – Insertion of separate company avoided direction under VATA 1994 Sch 6 para 1 – Purpose of transaction to avoid or defer VAT of exempt trader – Halifax ECJ [2006] STC 919 considered – Purpose of legislation – Whether transactions contrary to purpose – Redefinition of transactions if abuse – Appeal allowed
Hugh McKay (in 2005) and Nicola Shaw for the Appellant
Full Transcript
Bikeworld Limited v. The Director-General of the Mauritius Revenue Authority - Privy Council - 23 January 2007
Philip Baker QC appeared for the Respondent
Full Transcript
Commissioner of Inland Revenue (Hong Kong) v. Tai Hing Cotton Mill (Development) Limited - Hong Kong Court of Appeal - 22 December 2006
David Goldberg QC and Eugene Fung appeared for the Appellant
Michael Flesch QC, Clifford Smith SC and Neil Thomson appeared for the Respondent
Full Transcript
Executors of Dr Harvey Ernest Postlethwaite v. HMRC - Special Commissioners - 22 November 2006
Inheritance tax – Transfer by close company – Whether gratuitous benefit intended – Surplus funds wholly attributable to services of sole participator – Salary one-eighth of fees earned for company – Lump sum paid to FURBS – Death benefit for dependants – Whether shown that gratuitous benefit not intended – IHTA 1994 s. 10, 12, 13, 86, 94 – Appeal allowed
Patrick Way and Claire Simpson appeared for the Appellants
Full Transcript
The Commissioners for Her Majesty's Revenue and Customs v. Valentine Marketing Holdings Limited - Chancery Division - 13 November 2006
Nicola Shaw appeared for the Appellant
Full Transcript
(1) Simon Hinsley (2) Jeremy Milsom v. HM Revenue and Customs - Special Commissioners - 9 November 2006
Employment income - deductions in determining taxable income - airline pilots becoming liable to reimburse training costs incurred earlier in their employment on leaving airline - payment made in tax year after employment ceased - whether, if deductible, deductible in year paid or in year obligation arose - held in the year incurred - whether expense incurred wholly exclusively and necessarily in the performance of the duties - held no
Nicola Shaw appeared for the Respondent
Full Transcript
International Masters Publishers v. HM Revenue and Customs - Court of Appeal - 8 November 2006
John Walters QC appeared for the Appellant
Nicola Shaw appeared for the Respondent
Full Transcript
Total UK Limited v. HM Revenue and Customs - Chancery Division - 3 November 2006
John Walters QC appeared for the Appellant
Full Transcript
See also article by John Walters QC and Peter Landon regarding this case in the articles section of this website
Robert Gaines-Cooper v. HM Revenue and Customs - Special Commissioners - 31 October 2006
INCOME TAX – preliminary issues – domicile, residence and ordinary residence in tax years 1992/93 to 2003/2004 – Appellant purchased house in the Seychelles in 1975 and obtained a residency permit in 1976 – Appellant indirectly retained house and assets in England – latterly the Appellant’s wife and son resided in England – whether the Appellant retained his domicile of origin in England – yes – or whether Appellant acquired a domicile of choice in the Seychelles – no – whether the Appellant was resident in the United Kingdom – yes - whether the Appellant was ordinarily resident in the United Kingdom – yes – appeal on the preliminary issues dismissed – ICTA 1988 s 336
Michael Flesch QC and Nicola Shaw appeared for the Appellant
Full Trancript
News Datacom Limited v. Atkinson (HMIT) - Special Commissioners - 6 September 2006
Corporation Tax -- Two first issues -- (1) Was NDSP resident in UK? Held resident outside. (2) Was assessment under section 178 TCGA out of time because section 178(10) was exhaustive? Held section 178(10) not exhaustive and assessment in time.
David Waksman QC and Conrad McDonnell appeared for the Appellant
Full Transcript
Abdul Raouf Jauffur v. The Commissioner of Income Tax - Privy Council - 21 June 2006
Philip Baker Q.C. appeared for the Respondent
Full transcript
Richard Madeley and Judith Finnigan v. The Commissioners for Her Majesty's Revenue and Customs - Special Commissioners - 9 June 2006
INCOME TAX - Deductibility of agents fees incurred by TV presenters - whether allowable under s. 201A TA 88 - whether allowable or allowable in part as an expense necessarily incurred in the performance of the duties under Schedule E - statutory construction - the legislative context in which a provision was introduced - Pepper v. Hart - Appeal allowed
Patrick Way and Aparna Nathan appeared for the Appellants
Full Transcript
Agassi v. Robinson (HMIT) - House of Lords - 17 May 2006
Patrick Way and Nicola Shaw appeared for the Respondent
Full Transcript
Her Majesty's Revenue and Customs v. Salaried Persons Postal Loans Limited - Chancery Division - 7 April 2006
Felicity Cullen appeared for the Respondent
Full Transcript
Mohammed Siddiq Khan v. Her Majesty's Revenue and Customs - Court of Appeal - 23 February 2006
Christopher Vajda QC and Nicola Shaw appeared for the Respondent
Full Transcript
Longborough Festival Opera v. Her Majesty's Revenue and Customs - Chancery Division - 27 January 2006
Aparna Nathan appeared for the Appellant
Full Transcript
Wood v. Holden (HMIT) - Court of Appeal - 26 January 2006
David Goldberg QC and Aparna Nathan appeared for the Respondents
Full Transcript
Andre Agassi v. S Robinson (HMIT) (Bar Council and Law Society intervening) - Costs Hearing - Court of Appeal - 2 December 2005
The Court of Appeal's verdict on the efficacy of Licensed Access (formerly Bar Direct)
Patrick Way and Nicola Shaw appeared for the Appellant
Full Transcript
College of Estate Management v. Commissioners of Customs and Excise - House of Lords - 20 October 2005
Rupert Anderson QC and Nicola Shaw appeared for the Appellants
Full Transcript
Salaried Persons Postal Loans Limited v. Commissioners of Revenue and Customs - Special Commissioners - 5 October 2005
CORPORATION TAX – small companies’ relief – whether associated company carried on business by receiving rent from property that it had previously occupied for its trade following cessation of the trade – no – appeal allowed
Felicity Cullen appeared for the Appellant
Full Transcript
PM v. UK - European Court of Human Rights - 19th July 2005
The European Court of Human Rights in Strasbourg decided against the United Kingdom government and held that the UK tax rules on qualifying maintenance payments were discriminatory as they discriminated between married and unmarried couples.
Philip Baker QC and Tom De La Mare acted pro bono as Counsel to Liberty, the human rights organisation
Full Transcript
Longborough Festival Opera v. Commissioners of Customs and Excise - VAT Tribunal - 26 May 2005
EXEMPTION – Cultural services – Eligible body- Preclusion from distributing profits – Management and administration on voluntary basis by persons with no financial interest in the body’s activities – Appellant company limited by guarantee having four “trustees”- Trustee undertaking to guarantee losses of Appellant – Same trustee making loans to Appellant – Same trustee owning premises in which Appellant stages operatic productions – Same trustee sole director and majority share holder of commercial company which had financial dealings with Appellant – Whether Appellant managed and administered on voluntary basis by person with no financial interest in its activities – No – EC Sixth Dir, Art 13A.2(a) – VATA 1994, Sch 9, Gp 13, Item 2(b), Note (2)
Hugh McKay and Aparna Nathan appeared for the Appellant
Full Transcript
British Telecommunications Plc, R (on application of) v. HM Revenue and Customs - Administrative Court - 25 May 2005
Timothy Brennan QC and Nicola Shaw appeared for the Defendant
Full Transcript
Rafferty v. HM Revenue and Customs - Special Commissioners - 19 May 2005
INCOME TAX – Appellant was a self-employed sales associate with Allied Dunbar and on retirement sold his practice to a subsidiary company of Allied Dunbar - whether renewal commissions received after the discontinuance of the trade arose from the carrying on of the trade before the discontinuance – yes - whether on the transfer of the trade there was a permanent discontinuance of the trade by reason of a change in the person carrying on the trade – yes – appeal allowed - ICTA 1988 Ss 103, 106, 110 and 113
ASSESSMENT – discovery of loss of tax – conditions for making assessment – whether the Special Commissioners have jurisdiction to consider whether an assessment falls within section 29(2) – yes – whether the Appellant's tax return was made in accordance with the practice generally prevailing at the time – no – whether the officer of the board could have been reasonably expected on the basis of the information made available to him to be aware that profits which ought to have been assessed to tax had not been assessed – no –TMA 1970 S 29(2) and (5)
David Goldberg QC appeared for the Appellant
Full Transcript
Abbey National PLC v. Commissioners of Customs and Excise - Chancery Division - 6 May 2005
David Goy QC and Claire Simpson appeared for the Appellant
Full Transcript
Khan v. Commissioners of Customs and Excise - Chancery Division - 19 April 2005
Nicola Shaw appeared for the Respondents
Full Transcript
Wood v. Holden (HMIT) - Chancery Division - 8 April 2005
David Goldberg QC and Aparna Nathan appeared for the Appellant
Full Transcript
Andre Agassi v. Robinson (HMIT) - Court of Appeal - 19 November
2004
Patrick Way appeared for the Appellant
Full Transcript
UK Tradecorp Ltd, R (on the application of) v. Commissioners of Customs and Excise - Administrative Court - 10 November 2004
Rupert Anderson QC, Hugh McKay and Nicola Shaw for the Defendants
Full Transcript
Jansen Nielsen Pilkes Limited v. Tomlinson (HMIT) - Special Commissioners - 29 March 2004
EU LAW – small companies' rate of corporation tax – whether inclusion of non-resident associated companies in the computation is a restriction on freedom of establishment or discriminatory – no – appeal dismissed
Claire Simpson appeared for the Appellant
Full Transcript
MEPC Holdings Limited v. Crispin Mark Taylor (HMIT) - House of Lords - 18 December 2003
David Goldberg QC and Barrie Akin appeared for the Appellants
Full Transcript
Collector of Stamp Revenue v. Arrowtown Assets Limited - 4 December 2003
David Goldberg QC and Chua Guan Hock SC appeared for the Respondent
Full Transcript
Venables & Others v. Hornby (HMIT) - House of Lords -
4 December 2003
Conrad McDonnell appeared for the Appellant
Full Transcript
Greycon Limited v. Klaentschi (HMIT) - Special Commissioners - 15 July 2003
KEYMAN INSURANCE – whether proceeds taxable – policy taken out as a requirement of a potential investor providing funding and obtaining options over shares – not taxable
Barrie Akin appeared for the Appellant
Full Transcript
Inwards v. Williamson (HMIT) - Special Commissioners - 16 June 2003
CAPITAL GAINS TAX – Reinvestment relief – Return of value – Acquisition by director of shares newly issued - £375,000 paid for shares – Delay before issue – No contract although arrangement that payment was for shares – Debt to director until issue – Whether debt incurred "on" acquisition – Whether TCGA s.164L covers debt itself incurred as part of arrangements for acquisition – Mischief rule – Appeal allowed
Patrick Way appeared for the Appellant
Full Transcipt
Mansworth (HM Inspector of Taxes) v. Jelley – Court of
Appeal – 12 December 2002
This appeal concerned the interaction of s.17 (market value rule), s.28
(timing rule) and s.144(3) (single transaction rule on the exercise
of options) Taxation of Chargeable Gains Act 1992. The taxpayer had
been granted share options as a result of his employment outside the
United Kingdom and had later exercised those options when he became
United Kingdom resident. The issue was whether, as the Revenue said,
the taxpayer’s base cost should be the market value of the option
at the time of the grant plus the amount actually paid for the exercise
of the option (which gave a lower base cost) or, as the taxpayer argued,
the market value of the shares at the time that the option was granted.
The Court of Appeal, upholding the High Court and Special Commissoners,
said that the taxpayer’s arguments were correct.
Tmothy Brennan QC and Hugh McKay appeared for the Appellant
Full Transcript
John C McBride v. Stephen John Blackburn (HM Inspector of Taxes)
– Special Commissioners – 23-25 September 2002
The issue in this case was whether certain sums paid to the taxpayer
were subject to Schedule E or were tax free. There were subsidiary arguments
in relation to s.148 and s.154 Taxes Act 1988 but the main argument
was whether the payments received by the taxpayer were voluntary payments
in respect of the discharge of the duties of an office or were wholly
of the nature of a gift.
The Special Commissioners determined, in relation to the facts, that
the payments made to the taxpayer were, as a result of his “work”
on two committees in relation to the Lloyd’s litigation and were,
therefore, taxable.
Felicity Cullen appeared for the
Appellant
Hugh McKay appeared for the Respondents
Full Transcript
St Dunstan’s v. Commissioners of Customs & Excise
– VAT Tribunal – 10-11 October 2002
This case concerned whether the supply of services in relation to works
on a protected building were made in the course of approved alteration
of that building within Items 2 and 3 of Group 6, Schedule 8, VATA 1994.
The Tribunal concluded that they were not since the building was not
intended for use solely for a relevant residential purpose or a relevant
charitable purpose within Notes 4 and 6 of Group 5, Schedule 8, VATA
1994.
Hugh McKay appeared for the Respondents
Full Transcript
Vassall Centre Trust v. Commissioners of Customs & Excise
– VAT Tribunal – 4-5 September 2002
This case concerned whether certain supplies modifying a building
owned by the Appellant trust could correctly come within the terms of
Group 12, Schedule 8 VATA 1994’s supplies to or for the benefit
of handicapped persons. Whilst it gave the Tribunal no pleasure to reach
that conclusion it concluded that the supplies did not so qualify for
zero-rating and that the Appellant’s appeal should be dismissed.
Hugh McKay appeared for the Respondents
Full Transcript
Kimberly-Clark Limited v. Commissioners of Customs & Excise
– VAT Tribunal – 9-10 September 2002
Kimberly-Clark operated a promotion whereby it sold “Huggies”
nappies in a plastic toybox rather than the usual packaging. The toybox
would have other uses beyond being the means for selling the Huggies.
The first issue was whether there was a single composite supply or there
were two multiple supplies. If the former, the supply of the toybox
would be part of the composite zero-rated supply of the nappies under
Item 1, Group 16, Schedule 8 VATA 1994. If not it would be a separate
standard-rated supply. The Tribunal concluded in the Commissioners’
favour.
The second issue was whether there was a disposal of business assets
for no consideration and whether the “small gifts” exception
in paragraph 5, Schedule 4, VATA 1994 applied. Again the Tribunal considered
it did not.
Hugh McKay appeared for the Respondents
Full Transcript
Nutri (Imports & Exports) Limited v. Commissioners of
Customs & Excise – VAT Tribunal – 18-20 June 2002
This is a Customs duties classification case regarding certain products
imported by the Appellant. The issue was whether the products, which
might broadly be described as alternative medicine products, should
be classified as organic chemicals, pharmaceutical products or, as the
Commissioners asserted, effectively food preparations. The Commissioners
succeeded in this case as the Tribunal concluded that all of the preparations
were correctly to be classified as edible products.
Hugh McKay instructed by Titmuss Sainer Dechert for the Appellants
Full Transcript
Dextra Accessories Limited v. MacDonald (HM Inspector of Taxes)
– Special Commissioners – 22-25 July 2002
There were two issues in this case. The first issue was whether contributions
paid by the Appellant companies were immediately deductible from those
companies’ profits or should have the tax deduction deferred within
the terms of s.43(11) Finance Act 1989. The second issue was whether
sub-funds and loan from sub-funds in respect of the individual Appellants
were subject to Schedule E income tax using, amongst other things, the
principles described in W T Ramsay v. IRC and MacNiven v. Westmoreland
Investments Limited. The Special Commissioners decided in favour of
the taxpayers on both points.
Timothy Brennan QC and Hugh McKay appeared for the Respondents
Full Transcript
SOC Private Capital Limited v. Commissioners of Customs &
Excise – VAT Tribunal – 13-15 May 2002
This case concerned the extent of the exemption concerning supplies
of insurance and supplies of financial services. Taxpayers were members
agents at Lloyd’s and the first issue was whether the members
agents were insurance agents and the Tribunal concluded that they were.
However, the Tribunal concluded that the Appellants did not make supplies
of financial services. The relevant legislation was Article 13B(a) and
(d)(3) of the Sixth Directive and reference was also made to the Article
2 of the Insurance Directive.
Hugh McKay appeared for the Respondents
Full Transcript
Mr Y Lai and Mrs M Y Lai v. Commissioners of Customs &
Excise – VAT Tribunal – 7 May 2002
The Appellants applied for disclosure of certain “unused material”
arguing that in relation to civil penalty proceedings the implication
of the Human Rights Acts and the European Convention on Human Rights
meant that the Commissioners should disclose all material prior to the
taxpayers being required to lodge their defence. The President of the
Tribunal revisited what he had said earlier in Nene Packaging Limited
v. CCE and dismissed the taxpayers’ application.
Hugh McKay appeared for the Respondents
Full Transcript
Co-Work Camphill Limited v. Commissioners of Customs and Excise
– VAT Tribunal – 4 June 2001 & 28 February 2002
This is a case which considered whether certain building works were
to be zero-rated (as the Appellant argued) as supplies of construction
of a building intended solely for relevant residential or relevant charitable
use. The relevant statutory provisions were Item 2 and Notes 4, 5, 6,
16 and 18 of Group 8, Schedule 5 VATA 1994. The Commissioners were successful
and the Tribunal concluded that the works did not constitute works of
construction but were merely works of alteration.
Hugh McKay appeared for the Respondents
Full Transcript
Look Ahead Housing and Care v. Commissioners of Customs and
Excise – VAT Tribunal – 28 March 2002
The issue in this case was whether the provision of short term accommodation
in hostels for homeless and rough sleepers were exempt supplies of welfare
services or standard rated supplies of accommodation. The Appellant
argued for the latter which enabled it to recover sums of input tax.
The relevant statutory provisions were Item 1D and Note 9 of Group 1,
Schedule 9 VATA 1994 and Item 9 and Notes 6 and 7 of Group 7, Schedule
9 VATA 1994. The taxpayer Appellant was successful.
Hugh McKay appeared for the Respondents
Full Transcript
University of Bristol v. Commissioners of Customs and Excise
– VAT Tribunal –16 July 2001
Hugh McKay appeared for the Respondents
Full Transcript
Acorn Management Services Limited v. Commissioners of Customs
and Excise – VAT Tribunal – 31 Julyl 2001
Acorn provided accommodation for students from US universities in Central
London. The issue was whether the accommodation was an exempt supply
of land (as the taxpayer argued) or a taxable provision of accommodation
in a hotel or similar establishments (as the Commissioners said). The
Tribunal agreed with the Commissioners.
David Goldberg QC appeared for the
Appellant
Hugh McKay appeared for the Respondents
Full Transcript
QED Marine v. CCE – VAT Tribunal – 26 June 2001
This appeal concerned a self build partnership who were constructing
a Dutch barge as their permanent living accommodation. They sought zero-rating
treatment for supplies made to them during construction on the basis
that the boat was a “qualifying ship” within the meaning
of Schedule 8 of VATA 1994. The Tribunal held, however, that until a
ship had been completed sufficiently to render it seaworthy it could
not properly be described as a qualifying ship.
Hugh McKay, appeared for the Respondents
Full transcript
Royal Midland Counties Home for Disabled People v. CCE –
Chancery Division – 20 June 2001
Royal Midland Counties Homes for Disabled People concerns an appeal
from the VAT and Duties Tribunal by the charity, called Castel Froma,
against Customs’ refusal to zero-rate their purchase of a backup
generator. Castel Froma’s argument was that the generator was
zero-rated as an accessory under Legal Note 3(c), Group 15, Schedule
8 VATA 1994. The judge agreed with the charity’s analysis. He
said that the test was a subjective test, not an objective test as had
been found by the Tribunal. One must look at the circumstances in which
the taxpayer acquired the particular item to decide whether it was an
accessory or not within the meaning of the legislation.
Hugh McKay, appeared for the Appellant
Full transcript
West Devon Borough Council v. CCE – Queen’s Bench
Division – 24 July 2001
West Devon Borough Council (“the Council”) carried out works
of improvement to the Wharf at Tavistock with a view to generating jobs,
tourism and generally improving the economy of that part of West Devon.
The Council obtained a grant of £336,000 odd from European Union
towards the reconstruction work which were in the sum of £830,000.
The Wharf was to be occupied by an Arts Centre. The Council entered
into a lease at a premium of £130,000 together with a peppercorn
rent thereafter. The duration of the lease was 35 years. The Council
sought to recover the input tax in respect of the building works under
s.33 VATA 1993.
The Commissioners refused and the Council appealed to the Tribunal
where it was unsuccessful. It further appealed to the High Court, again,
its appeal was dismissed. The judge held that its supplies were not
“non-business” within the meaning of s.33 VATA. An argument
based on s.73(1) and s.73(2) VATA 1994 also was unsuccessful.
Hugh McKay, instructed by Dario Garcia, appeared for the Council
Full Transcript
Tower Hamlets Housing Action Trust v. CCE – VAT Tribunal
–14 July 2001
The issue in this appeal is first whether there should be an apportionment
for the provision of services consisting of the supply of telephone
equipment and photocopying services from the supply of office accommodation
under a tenancy agreement. If the supply is a separate supply of services,
the issue arises whether it is supplied for consideration during the
rent and service charge-free period under the tenancy agreement. Appeal
dismissed in relation to the telephone equipment and allowed in relation
to the photocopying services.
Nicola Shaw, instructed by Field Fisher
Waterhouse, appeared for the Appellant
Full Transcript
Carstairs (HMIT) v. Sykes – Chancery Division –
2 November 2000
The taxpayer was not resident or ordinarily resident in the United
Kingdom from 15 June 1987 to 15 February 1993. He appealed that against
an assessment to income tax for the year 1993-94 on the ground that
he was entitled to a foreign earnings deduction pursuant to s.193(1)
ICTA 1988. He claimed that he was entitled to include the period of
his absence from the United Kingdom in aggregating the qualifying period,
in respect of which the deduction fell to be calculated, on the ground
that there was nothing in the 1988 Act that confined the qualifying
period to the time at which he was resident or ordinarily resident in
the United Kingdom. The qualifying period was defined in para 3 of Schedule
12 to the 1998 Act by reference to “days of absence” from
the United Kingdom. The General Commissioners allowed the taxpayer’s
appeal and the Revenue appealed.
Nicola Shaw, instructed by Terence St
John Millett, appeared for the Taxpayer
Full Transcript
Parents and Children Together v. Commissioners of Customs
and Excise – VAT Tribunal – 5 June 2001
This case concerned a society which arranged adoptions for girls in
orphanages in China with parents in Oxfordshire. The society argued
that the supplies should be exempt from VAT as supplies of welfare for
children or alternatively international services. The Tribunal disagreed.
The services were supplied to the prospective adoptive parents and not
the children and where thus insufficiently connected with the welfare
of the children themselves and they were supplied in the United Kingdom.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full Transcript
Venables & Others v. Hornby (HMIT) – Chancery Division
- 27 April 2001
The case concerns directors' entitlement to draw a pension on early
retirement. The taxpayer retired as an executive director (and acting
managing director) of the company aged 53, and drew a pension. The Revenue
argued that because the taxpayer remained a director of the company
thereafter (albeit an unremunerated non-executive director) then he
could not have 'retired', and accordingly the Revenue assessed the pension
payents to tax under s.600 ICTA 1988 as being unauthorised payments
out of the pension fund.
Held: 'retirement' for pensions purposes meant the cessation of active,
remunerated employment. The taxpayer had retired within the meaning
of the pension trust deed and rules in this case.
Obiter: following Hillsdown Holdings v. IRC (1999), even if the payments
had been unauthorised, if the recipient had been an actual or constructive
trustee and had in fact been in a position to repay the monies to the
pension fund, no charge to tax would have arisen under s.600.
Conrad McDonnell, instructed by
Warner & Richardson, appeared on behalf of the Appellants
Full transcript
The Queen On the Application of Greenwich Property Limited
v. The Commissioners of Customs & Excise – 28 March
2001
This was an application for a Judicial Review following the VAT Tribunal’s
holding that it could not hear the Appellant’s appeal. It concerned
the application of certain guidelines issued by the Commissioners to
the Committee of Vice-Chancellors and Principals of Universities in
the United Kingdom and the extent to which they could be relied upon
by a particular university. Greenwich Property Limited succeeded in
showing that it had a “legitimate expectation” before the
Administrative Court and its application for Judicial Review was therefore
allowed.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full transcript
A Subhan, M Uddin & M Mustak (t/a Jube Raj) – VAT
Tribunal – 26 February 2001
This was a preliminary hearing on a matter raised by the Appellant.
It concerned the point when an assessment to VAT is “made”
for the purpose of the legislation. The Tribunal declined to follow
the Edinburgh VAT Tribunal in the Royal Bank of Scotland case and held
that an assessment is made when the officer decides on the amount to
be entered and enters on Form 641 which he then signs and checks.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full transcript
Dinaro Limited t/a Fairway Lodge – VAT Tribunal– 16 March 2000
The Appellant in this case provided accommodation in the form of a “halfway
house” for people with mental health problems. The issue was whether
the provision of accommodation was exempt from VAT under either Group
1 or Group 7 of Schedule 9 VAT Act 1994. If it was within Group 1 of
Schedule 9 the further issue arose of whether the Appellant was excluded
from exemption by Item 1(d) Note 9 to Group 1 as offering sleeping accommodation
similar in nature to an hotel. In the Appellant’s particular circumstances
it was held not to be such a similar establishment. Therefore this appeal
was allowed.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full transcript
D L Marketing (Direct Link) Limited v. Commissioners of Customs
& Excise – VAT Tribunal – 24 November 2000
This was an appeal by a company which described itself as a “print
broker” against the Commissioners decision that it made standard-rated
supplies of advertising services rather than zero-rated supplies of
printed material. The taxpayer succeeded on the basis that there were
supplies of printed material and that zero-rating properly applied.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full transcript
Express Medicare Limited v. Commissioners of Customs &
Excise – VAT Tribunal – 24 November 2000
The Appellant had provided incontinence pads to nursing homes for named
residents. The issue was whether the supply of those incontinence pads
was zero-rated within the terms of Group 12, item 2(g), Schedule 8 Value
Added Tax Act 1994. The Commissioners took the view that they were not
and they assessed them as standard-rated by reason of s.47(2A) VATA
1994. The Commissioners argued that the supplies of the incontinence
pads had been made to the nursing homes, and not to the handicapped
persons by virtue of that provision. The Tribunal did not accept the
Commissioners argument and it took an examination of both English and
French and other language versions of Article 5.4(c) of the Sixth EC
VAT Directive. They took the view that the English language version
differs radically from the French version and that the English language
version incorrectly dealt with the term “contrat de commission”.
In allowing the taxpayers appeal the Tribunal held (see, in particular,
paragraph 48 of the decision) that the words “acts in his own
name” in s.47(2A) VATA 1994 do not cover an agent acting expressly
on behalf of a named principal. The wording of that provision cannot
be reconciled with Article 5.4(c) in the English version which itself
is different from the French version. Section 47(2A) treats goods in
the way of services whereas they are covered by different articles of
the Directive with totally different wording. Section 47(2A) did not
apply the services and the appeal was therefore allowed.
Hugh McKay, instructed by the Solicitor of Customs & Excise, for
the Respondent
Full transcript
Keesing (UK) Limited v. Commissioners of Customs & Excise
– VAT Tribunal – 26 June 2000
This case concerns the analysis of the arrangements which the Appellant
magazine publishing company made with the distributors. It was important
to discern whether Keesing acted as agent or principal. If the distributor
was the agent of the publisher it would be possible for the Appellant
to take advantage of the Extra Statutory Concession in relation to free
gifts forming less than 20% of the total cost of a publication which
then enjoy zero-rating treatment for printed material. The appeal was
dismissed because the Tribunal found that the Appellant and its distributor
both acted as principals. However, the case is important because it
demonstrates the costs so that the Tribunal is prepared to award costs
against the Commissioners where they fail to comply with their directions.
A directions hearing had been held in February 2000 and one of the directions
was that all witness statement should be served no later than 20 days
before the hearing. The Commissioners witness statement was served 4
days before the date of the hearing and the Tribunal made an award of
costs in the Appellants favour as a result.
Hugh McKay, instructed by Messrs. Fraser Russell (now merged with Baker
Tilly), for the Appellant
Full transcript
MEPC Holdings Limited v. Crispin Mark Taylor (HMIT) –
Special Commissioners – 27 September 2000
The group relief rules contain special provisions for computing the
amount of relief which can be surrendered by one member of the group
to another. This case is about how those rules apply where a company
has chargeable gains in a period but allowable losses arising in earlier
periods which reduce or eliminate chargeable gain. The question is whether
the chargeable gain reduces the amount of relief available for surrender.
It was widely thought that it did. But this case establishes that it
does not.
David Goldberg QC (instructed by Messrs
PricewaterhouseCoopers, Chartered Accountants) for the Appellant
Full transcript
John Gerald Gray (t/a William Gray & Sons) v. Commissioners
of Customs and Excise – Chancery Division – 23 August 2000
The issue in this case was whether one is required to use a forward
looking approach to taxable turnover under paragraph 1(3) Schedule 1
VATA 1994 or use the benefit of hindsight. Both the Tribunal and the
High Court took the view that a forward looking approach only was permissible.
The High Court explained that to allow a taxpayer who failed to comply
with the unequivocal rules set out in Schedule 1 of VATA 1994 would
be to put that taxpayer in a better position than a taxpayer who had
properly complied with all those obligations. Accordingly the appeal
was dismissed.
Hugh McKay (instructed by HM Customs & Excise) for the Respondents
Full transcript
THI Leisure Two Partnership v. The Commissioners of Customs
& Excise – 20 October 2000
This case concerned which of s.78 VATA 1994 and s.79 VATA 1994 (interest
or repayment supplement) applied in cases of sums not paid to taxpayers
as a result of the Commissioner’s error. The taxpayer argued that
both actually could apply, the Commissioners argued that only could
apply. The taxpayer was successful and obtained both interest and repayment
supplements in respect of sums wrongly overpaid to the Commissioners.
Hugh McKay (instructed by The Solicitor for HM Customs & Excise)
for the Respondents
Full transcript
Michael Black (1) Stephen Brown (2) Gregory Green (3) Malcolm
White (4) v. HMIT – SC 3106-9/99
The appellants appealed against various assessments to income tax under
Schedule E. The amounts appealed against were received by the Appellants
in the form of units in a unit trust provided to them by their employer.
It was agreed that the amounts were taxable under Schedule E as emoluments
from employment. The issue was whether the employer ought to have deducted
income tax under s.203 ICTA 1988 and the 1973 Regulations before providing
the units to the Appellants. The Commissioner held that the employer
ought to have deducted income tax before providing units to the Appellants.
Importantly (though this was not argued by the Taxpayers) the Commissioner
held that the transfer of units in a unit trust was a “payment”
within s.203 ICTA 1988.
Hugh McKay (instructed by The Taylors Partnership, Chartered Accountants)
for the Appellants
Full transcript
Sports Club (1) Evelyn (2) Jocelyn (3) v. HM Inspector of
Taxes – SC 3114-16/99
Taxes Act 1988 ss. 19, 154, 203 and 595 – Appeal allowed.
David Goldberg QC and Hugh McKay (instructed
by Lawrence Jones) for the taxpayers
Full transcript
West Herts College v. Commissioners of Customs and Excise
– Tribunal No: LON/99/0749 - 17 July 2000
VATA 1994 Schedule 4 paragraph 5(1)(2), EEC Sixth Directive Article
5(4) – Appeal allowed.
Hugh McKay (instructed by The Solicitor for Customs & Excise) for
the Commissioners (under appeal)
Full transcript
Greenwich Property Limited v. Commissioners of Customs &
Excise – Tribunal No: LON/99/1133 - 20 July 2000
VATA 1994 s.84(10) and VATTR 1986 Rule 6(1)
Extra-statutory concession prior decision appeal with respect to application
of non-statutory concession (known as “the Concordat”) of
Tribunal. Whether Concordat was not application was a “prior decision”
within the meaning of s.84(10) upon which the decision to not allow
input tax relief depended – answer: no.
And see also East Dorset Housing Association v. Commissioners of Customs
and Excise
Hugh McKay instructed by the Solicitors of Customs & Excise for
the Respondents
Full transcript
Medivac Healthcare Limited v. Commissioners of Customs and
Excise – Tribunal No: LON/99/1271 - 8 September 2000
Medivac is a company which manufactures goods specially designed for
asthmatics and people suffering from acute rhinitis and eczema. In particular
it manufactures a vacuum cleaner which uses a special filter designed
to arrest even the most minute particles of dust as well as special
bedding covers, a dehumidifier, an anti-allergen spray and an allergen
medication system.
Customs carried out a review of the application of zero rating under
item 2(g) Group 12 Schedule 8 VATA 1994 in relation to the supply of
such goods for asthmatics and rhinitis and eczema sufferers and concluded
that they were no longer capable of qualifying for zero rating
The Commissioners then applied this treatment specifically to the appellants
products which it disputed and it appealed to the Tribunal.
Before the Tribunal the two primary issues were for whom were the Appellants
products designed and were those people “handicapped”, which
in that context and by virtue of Note 3 to Group 12 ibid. means “chronically
sick or disabled”.
On the first issue the managing director of the appellants company
who had been involved at all stages in the design process of all the
items, and was the designer of the vacuum cleaner, gave evidence which
was accepted by the Tribunal that the main purpose for which each of
the products was designed was to reduce house dust mite allergen or
to neutralise the allergens effect in those who were sensitive to it.
On the second issue expert evidence was given by Professor Ayres, Professor
of Respiratory Medicine at Warwick University and a consultant at Birmingham
Heartlands Hospital, explained that asthma is commonly described by
reference to five steps. Step one being the mildest and step five being
the most severe. A patient at step four or five will usually be chronically
symptomatic and may be unable to work and quite often will be permanently
impaired. When a sufferer falls within those steps he would be encouraged
to look seriously at trigger factors which may include house dust mite
allergen. Professor Ayres also described the term “chronic”
in medical terms as meaning a condition that is long standing and not
as implying a level of severity. He went on to summarise:
“Overall, therefore, asthma, rhinitis and eczema are all chronic
diseases and a cause of disability in a proportion of some, but not
all, patients. One of the major causes of these three conditions is
allergic sensitisation to the house dust mite ... I would recommend
the use of mite controlled exposure in those patients who I would register
as chronically sick or disabled as they experience significant distress
or degradation of quality of life.”
There was also a subsidiary issue as to whether the anti-allergen spray
was “equipment or appliance” and the Tribunal accepted it
was.
Hugh McKay (instructed by Messrs. Travers Smith Braithwaite) for the
Appellant through the Bar Pro Bono Unit
Full Transcript
(1) Shiu Wing Limited (2) Futurian Limited (3) Shiu Kwong Limited v.
The Commissioner of Estate Duty - 12 July 2000
This is a landmark decision in Hong Kong.
The Deceased entered into a number of transactions, the essential element
in each being a disposal by him of Hong Kong property to an Isle of
Man Unit Trust. The end result of each transaction – viewing the
facts from the most favourable Revenue viewpoint – was that the
Deceased transferred his Hong Kong property to an Isle of Man Unit Trust
in consideration of the Unit Trust issuing units to an Isle of Man Discretionary
Trust for the benefit of the Deceased’s family. The Hong Kong
Revenue argued that, applying the Ramsay principle to the admittedly
pre-ordained series of transactions, the Deceased had made a gift of
property situate in Hong Kong which was liable to estate duty because
the Deceased failed (by 2 days) to survive the 3 year gift period.
In the High Court Findlay J. held that, even on the worst view of the
facts from the taxpayer’s viewpoint, the Deceased’s gift
was of non-Hong Kong property, i.e. units in the Isle of Man Unit Trust.
The Court of Appeal, by a 2-1 majority, reversed Findlay J. The Court
of Final Appeal has now unanimously (5-0) restored Findlay J.’s
decision.
The case is extremely important in Hong Kong, first, in that it indicates
for the first time the Court of Final Appeal’s approach to the
Ramsay principle and, secondly, because it upholds the effectiveness
of arrangements that have been regularly used in Hong Kong in order
to avoid estate duty.
Michael Flesch QC, Robert Kotewell
SC and Eugene Fung (instructed by Messrs. Simmons & Simmons) for
the appellants
Full transcript
Pawlowski (Collector of Taxes) v. Dunnington - [1999] STC
550 (CA)
The respondent was a director of a company. The local inspector of taxes
discovered that the company was, contrary to its legal obligations,
not making PAYE deductions from the respondent’s emoluments. The
local inspector of taxes issued, under Reg. 49 Income Tax (Employment)
Regulations, determinations of tax due from the company for the relevant
years. On the failure of the company to pay, the local inspector issued
under Reg. 49(5) a direction that the tax ought to be collected from
the respondent. The respondent contended that these directions were
unlawfully made because there was no material available to te Board
upon which the Board could fairly and rationally form the opinion that
the respondent “received emoluments knowing that the [company
had] wilfully failed to deduct” PAYE.
Reg. 49(5) provides: “Where- any part of the tax determined under
this regulation is not paid within 30 days from the date on which the
determination became final and conclusive, and the Board are of the
opinion that an employee in respect of whose emoluments the determination
was made has received his emoluments knowing that the employer has wilfully
failed to deduct the amount of tax which he was liable to deduct under
these Regulations from those emoluments, the Board may direct that such
part of that tax as it appears to them should have been but was not
deducted under these regulations by the employer on payment of the relevant
emoluments shall be recovered from the employee, and, where the Board
so direct, the employer shall not be liable to pay that part of that
tax to the collector.”
The defence that the Board did not have available material in order
to determine fairly and rationally that the respondent “received
emoluments knowing that the [company had] wilfully failed to deduct”
PAYE, is a public law defence. Is the respondent to collection proceedings
entitled to raise a public law defence which puts in issue the legality
of directions underlying the assessment?
Simon Brown LJ decided, on the basis of Wandsworth LBC v Winder [1985]
AC 461, that the defendant was permitted to rely on a public law defence
at a rehearing in the County Court.
Barrie Akin appeared for the taxpayer
Full transcript
R. v. Special Commissioner of Income Tax ex parte CIR AND
R v. CIR ex parte Ulster Bank Ltd - [2000] STC 537 (QBD)
This is an astonishing decision. It decides that a role apparently given
to the Board of Inland Revenue can be performed by a generally authorised
officer who is not a member of the Board. The point arose in the context
of notices which can be served under s.20 of the Taxes Management Act
and undermines the apparent safeguards in the section for notices given
by the Board. The issue in this case is similar to that in ex parte
Davis Frankel Mead (QB). An appeal has been lodged against this part
of the decision.
The good thing about Ulster Bank is that the Revenue made an agreement
not to apply for consent to issue a notice after a certain date. They
were held bound by this agreement. This is a most important and encouraging
development even if the Judgement is somewhat grudging about the achievement.
David Goldberg QC and Clive Lewis
appeared for Ulster Bank Limited
Full transcript
Carr (HMIT) v. Armpledge Ltd – Carr (HMIT) v. Fielden
& Ashworth Ltd - unreported as yet
Carry back of surplus ACT and the order in which claims are to be given
effect to – s.239(3) ICTA 1988.
Decision of Ferris J reversed. The taxpayers were entitled to have
their claims to carry back surplus ACT in respect of different accounting
periods given effect to in the order in which the claims were made.
The taxpayers made claims pursuant to s.239(3) ICTA 1988 to carry back
surplus ACT in respect of a particular accounting period and then subsequently
made claims to carry back surplus ACT in respect of an earlier accounting
period. The taxpayers required effect to be given to the earlier claim
in respect of the later accounting period before the later claim in
respect of the earlier accounting period. The Revenue contended that
the claims should be given effect to in the chronological order of the
accounting periods. Held: the taxpayers were entitled to effect being
given to their claims in the order in which they were made.
Lord Goldsmith QC and David Goy QC appeared
for the taxpayers
Full transcript
Walker (Inspector of Taxes) v. Centaur Clothes Group Ltd -
[2000] STC 324, [2000] 1 WLR 799
Corporation tax. Accounting periods. "Within the charge to tax"
- s.832(1) ICTA 1988.
Decision of Court of Appeal (Click here) reversed. ACT paid on a dividend
could be carried back and set against an earlier year's corporation
tax so long as the dividend was paid in an accounting period of the
company (s.239(3) ICTA 1988). The taxpayer company ceased trading on
6 January 1992 and accordingly an accounting period then ended. No new
accounting period started (s.12(2) ICTA 1988) unless the company continued
to be "within the charge to corporation tax". The company
had no source of income after 6 January 1992 until 30 September 1993
when it placed £2000 in an interest-bearing deposit account. The
Inland Revenue contended that between 6 January 1992 and 30 September
1993 the company was not within the charge to corporation tax and therefore
had no accounting period and so could not carry back ACT.
Held: because the company actually became liable to pay corporation
tax (in this case ACT, which is a kind of corporation tax) it was "within
the charge to corporation tax" at the relevant time and so had
an accounting period.
David Goldberg QC and Conrad
McDonnell appeared for the taxpayer
Full transcript
Trustees of British Telecom Pension Scheme & others v.
Clark (HMIT) (Court of Appeal) 24 February 2000
Appeal from the Decision of Lightman J of 14 October 1998 (Click here)
Sub-underwriting activities of the Post Office and British Telecom Pension
schemes did not constitute trading within Case I of Schedule D. Instead,
the sub-underwriting itself formed an integral part of the schemes’
investment process and took its colour therefrom. Accordingly the sub-underwriting
commission was income chargeable under Case VI of Schedule D, but exempted
by s.592(3) ICTA 1988.
In the context of s.686(2)(c) ICTA 1988, the word “property”
was not wide enough to encompass a trade. Therefore, s.686(2)(c) did
not exempt pension fund trading income from the additional trade of
tax applicable to trusts.
Michael Flesch QC and Felicity
Cullen appeared for the pension fund trustees
Full transcript
Nationwide Access Ltd v. Commissioners of Customs & Excise
(High Court) 14 February 2000
Appeal from the Decision of the VAT and Duties Tribunal
Hydrocarbon Oil Duties Act 1979 - whether vehicle with telescopic boom
constituted “mobile crane”
The Tribunal had held that lifting vehicles with telescopic booms rather
than ropes and pulleys were not “mobile cranes” for the
purposes of Schedule 1, paragraph 9 Hydrocarbon Oil Duties Act 1979.
This appeal by the taxpayer was allowed. The judge said that the Tribunal’s
approach gave an unduly restrictive meaning to “mobile crane”.
Instead a modernising construction was appropriate and the vehicles
were mobile cranes.
Hugh McKay appeared for Customs & Excise
Full transcript
The Commissioners of Customs & Excise v. GIL Insurance
Limited & Others (High Court) 16 February 2000
Tribunal – procedure – application to strike out –
preliminary issues – correct approach – VAT Tribunal Rules
1986, rule 18, rule 19(3)
The Tribunal has a wide discretion in relation to the width of proceedings
before it; the court should be slow to interfere with the Tribunals
decision on interlocutory matters, and only where the tribunal was plainly
wrong either through an error of law or by reaching a decision that
is Wednesbury unreasonable. Rule 19 gives the tribunal discretion for
its own proceedings, including (most probably) power to strike out parts
of pleadings in appropriate cases; rule 18 does not give the tribunal
power to strike out part only of an appeal.
The Tribunal adopted the correct approach in asking itself whether
there were reasonable grounds for the raising of the state and issue.
The taxpayers did have an arguable case. The Tribunal took a reasonable
approach.
Similarly, in relation to preliminary issues the tribunal was fully
entitled to take the view that none of the suggested preliminary issues
would necessarily be decisive of the case; none could be determined
as a pure question of law in isolation – from buildings of fact,
none was short and easily decided; and that it was preferable for all
issues to be decided together at a substantive hearing.
David Vaughan QC and Conrad McDonnell
appeared for the respondents
Full Transcript
A Pardoe (HMIT) v Entergy Power Development Corporation (Chancery
Division) 23 February 2000
Statutory interpretation. Section 777(9) ICTA 1988.
Decision of the Special Commissioners upheld. The Inland Revenue was
not entitled to issue a direction under s.777(9) requiring a purchaser
to withhold income tax from consideration paid by it to a vendor when
the vendor had not yet entered into a contract at the time the direction
was issued. The vendor was not a “person entitled to any consideration
or other amount taxable under ss.775 or 776” within s.777(9).
Felicity Cullen appeared for the
taxpayer.
Full transcript
EMI Group Electronics Ltd v Coldicott (Court of Appeal) 16
July 1999
Income tax. Schedule E. PILONs (Payments in Lieu of Notice).
Two employees had notice periods of six months. The contract of employment
provided for the contract to be terminated, either on the giving of
six months notice, or, at the employer's option, on the giving of less
notice and the making of a payment in lieu of notice. The employees
became redundant and were dismissed with notice of 1 day and 10 days
respectively. Payments in lieu of notice were made in accordance with
the employment contracts.
The issue was whether such payments were emoluments from the employment
(s.19 ICTA 1988) in which case they were taxable, or not, in which case
they were in principle taxable under s.148 ICTA 1988 but with the benefit
of the £30,000 exemption under s.188(4) ICTA 1988 [now see Schedule
11 ICTA 1988].
Held: the termination provisions, whereby the employee was entitled
to six months notice or an equivalent payment, produced security or
continuity of employment or at least salary, and were one of the inducements
for the employee to enter into the contract of employment. The PILONs
were thus payments from "being or becoming an employee", as
in Shilton v Wilmshurst. PILONs could not be likened to redundancy payments,
which fell outside the scope of s.19 ICTA 1988, because the reason for
providing the PILON was to allow for continuity of salary over the time
it might take to find alternative employment: unlike a redundancy payment,
it was not to relieve the hardship consequent upon becoming unemployed.
These PILONs were taxable under s.19 as emoluments from the employment.
Mairs v Haughey [1994] 1 AC 303 distinguished.
Andrew Thornhill Q.C. and Conrad McDonnell
appeared for the employer
Full transcript
Walker (Inspector of Taxes) v. Centaur Clothes Group Ltd [1998]
STC 814 (C.A.)
Corporation tax. Accounting periods. "Within the charge to tax"
- s.832(1) ICTA 1988.
Decision of Vinelott J (Click here) upheld. ACT paid on a dividend cannot
be carried back and set against an earlier year's corporation tax unless
the dividend was paid in an accounting period of the company (s.239(3)
ICTA 1988). The taxpayer company ceased trading on 6 January 1992 and
accordingly an accounting period then ended. No new accounting period
started (s.12(2) ICTA 1988) unless the company continued to be "within
the charge to corporation tax". The company had no source of income
after 6 January 1992, with the result that after that date it was not
within the charge to corporation tax and had no accounting period until
30 September 1993 when it placed £2000 in an interest-bearing
deposit account.
David Goldberg QC and Conrad
McDonnell appeared for the taxpayer
Full transcript
Clark v Trustees of British Telecom Pension Scheme & others
(Chancery Division) 14 October 1998
When a company listed on the London Stock Exchange makes a public issue
of shares or rights, the issue may be underwritten. The underwriter,
for a commission, agrees to purchase a proportion of any unsold shares
at the offer price - the underwriter accepts the risk of a fall in the
market during the offer period. The underwriter often lays off the risk
by inviting large pension funds, and other similar large investors,
to enter into sub-underwriting agreements; the fund receives a commission
for so doing.
The appellant pension funds (the British Telecom Pension Scheme, also
known as 'Hermes'; the Post Office Staff Superannuation Scheme; and
the Post Office Pension Scheme) sub-underwrote public issues made by
various companies. In every case, the fund already had a significant
investment in the company concerned. In cases where the pension fund
was obliged to honour its sub-underwriting commitment, it usually retained
the stock or rights so acquired.
Section 592(3) ICTA 1988 exempts from tax the underwriting commission
income received by an exempt approved scheme where that income is Schedule
D Case VI income. Trading income (i.e. Schedule D Case I income) received
by such a pension fund is not, however, exempt from tax. Section 686(2)(c)
ICTA 1988 provides that income from investments, deposits or other property
held for the purposes of certain classes of pension scheme is not subject
to the additional rate of tax applicable to discretionary trusts.
Held: The Special Commissioners were incorrect in holding that the
sub-underwriting activities of the pension funds did not constitute
trading. The only conclusion (on this question of fact and degree) which
the Special Commissioners could have reached if properly directed in
law was that the pension funds in respect of their sub-underwriting
activity were trading. The sub-underwriting commission income was accordingly
taxable under Schedule D Case I and was not exempt under s.592(3) ICTA
1988.
Section 686(2)(c) ICTA 1988 exempts only the fruits of ownership of
trust property held for the designated purposes; it does not exempt
the fruits of activities carried on by trustees. Accordingly, pension
fund trading income is not exempted from the additional rate of tax
applicable to trusts.
Michael Flesch QC and Felicity
Cullen appeared for the pension fund trustees
Full Transcript
United Friendly Insurance plc v IRC (Chancery Division) 22
April 1998
Life Assurance Premium Relief. Reg. 10(6), Income Tax (LAPR) Regulations
1978.
Under this system of relief, withdrawn on 13 March 1984, individual
policyholders deducted income tax from life assurance premiums paid,
and the life office then recovered such amounts ("the deficiencies")
from the Inland Revenue. In this case there was a substantive issue
concerning whether certain policies were written before of after 13
March 1984 - deficiencies had been recovered in respect of such policies
between 1984 and 1991, and the Inland Revenue now claimed that overpayments
of relief had been made. The Inland Revenue was out of time to raise
an assessment for such overpayments. A preminary question for determination,
raised by originating summons, was whether regulation 10(6) of the 1978
Regulations permits the Inland Revenue to recover any such overpayments
without raising an assessment.
Held: regulation 10(6) does confer on the Inland Revenue an immediate
enforceable right to recover overpayments made by it, if it succeeds
on the substantive issue.
David Goy QC and Philip
Baker appeared for the life office
Full transcript
Girvan v Orange Personal Communication Services Ltd (Chancery
Division) 3 April 1998
Interest. Whether or not "income arising". Receivability without
receipt.
The taxpayer opened two deposit accounts with Barclays Bank plc on
12 March 1990, and deposited substantial amounts in them. The accounts
were the bank's standard business deposit accounts, providing for interest
to be paid quarterly in arrear. The bank subsequently agreed to vary
the standard terms and conditions, agreeing at the taxpayer's behest
to "roll up" the interest until January 1993, or the earlier
date of closure of the accounts.
The Revenue contended that income arose to the taxpayer as the interest
accrued quarterly; the taxpayer contended that no income arose until
the date of payment.
Held: The interest was not "income arising" until paid to
the taxpayer, i.e. credited to an account in the taxpayer's name. The
taxpayer could not be said to have received the interest merely by virtue
of the fact that it had directed the bank what to do with it: the direction
given to the bank was given at a time before the first quarter's interest
had become payable, i.e. it was a direction in respect of a prospectively
due debt, and not of a sum of money which had already accrued to the
taxpayer. The Ramsay principle, as explained by Lord Steyn in IRC v
McGuckian [1997] STC 908, was not applicable to this genuine arrangement
between the parties, even though effected for tax reasons.
David Goldberg QC appeared for the
taxpayer
Full transcript
Aberdeen Milk Co Ltd v IRC (Special Commissioners) 6 March
1998
Statutory interpretation. Carry back of surplus ACT. McGuckian principle
applied.
The taxpayer was incorporated in 1993. Under Agriculture Act 1993, it
was permitted to take over the trade and function of the Aberdeen and
District Milk Marketing Board ("the Board"). The taxpayer
paid a dividend in 1996, and sought to carry back the ACT and set it
against the MCT paid by the Board in 1990. The Agriculture Act 1993,
Schedule 2 para.1, provides that the taxpayer is to be treated for the
purposes of the Corporation Tax Acts as having carried on the Board's
trade at times when the Board actually carried on that trade.
The Inland Revenue sought to deny set off of the taxpayer's ACT against
the Board's MCT since the two were strictly speaking two different companies.
The Special Commissioners accepted the taxpayer's argument that a
purposive approach to construction (as explained in IRC v McGuckian
[1997] STC 908) should be applied to Schedule 2 of the Agriculture Act
1993, and since it was clearly Parliament's intention that the transfer
of the trade from the Board to the taxpayer should be tax neutral, the
carry back of ACT of the former to set against MCT of the latter was
permitted.
Hugh McKay appeared for the taxpayer
Full transcript
See also Article by Nicola Shaw
Bestway (Holdings) Ltd v Luff (Chancery Division) 20 February
1998
Industrial Buildings Allowance. The taxpayer, which operated cash and
carry warehouses, sought to obtain IBAs on the ground that the buildings
were used "for the purposes of a trade which consists in the storage
... of goods" (CAA 1990, s.7(1)(f)).
Goods were stacked up to ceiling height in the warehouses; on average,
around 6 weeks' supply of each type of goods was held, assuming normal
volume of sales
Held: The determining factor is the purpose for which the goods are
kept or held. In this case, they were only stored to be available for
self-service by customers, which was a necessary incident of the business
of a wholesale supermarket; on the other hand, "storage" in
s.7(1)(f) CAA 1990 means storage as a purpose and end in itself.
David Goy QC and Aparna
Nathan appeared for the taxpayer
Full transcript
Trustees of British Telecom Pension Scheme & others v
Clarke (Special Commissioners) 16 December 1997
In a landmark decision for pension funds, the Special Commissioners
held that the sub-underwriting activities of the Post Office and BT
schemes did not constitute trading within Case I of Schedule D, rather
that the underwriting itself formed an integral part of the schemes'
investment process and took its colour therefrom. Accordingly the underwriting
commission was income chargeable under Case VI of Schedule D, but exempted
by s.592(3) ICTA 1988.
When companies listed on the London Stock Exchange make public issues
of shares or rights, the issue may be underwritten. The underwriter,
for a commission, agrees to purchase a proportion of any unsold shares
at the offer price - the underwriter takes the risk of a fall in the
market during the offer period. The underwriter often lays off the risk
by inviting large pension funds, and other similar large investors,
to enter into sub-underwriting agreements; the fund receives a commission
for so doing. The appellant funds sub-underwrote various public issues
in this way. In each case, the fund already had a significant investment
in the company concerned. Where the pension fund was obliged to honour
its sub-underwriting, it usually retained the stock or rights so acquired.
Although in the final analysis the decision turns on its own particular
facts, it will nevertheless be of considerable significance to all pension
funds who carry out underwriting activities.
The Special Commissioners also decided that had the underwriting commission
been trading income chargeable under Case I of Schedule D, then income
tax would have been payable at the rate applicable to trusts rather
than the basic rate.
Reinstated by Court of Appeal. See Trustees of BT Pension Scheme &
Others v. Clark
Reversed by the High Court on appeal. See Clark v. Trustees of British
Telecom Pension Scheme
Michael Flesch QC and Felicity
Cullen appeared for the pension fund trustees
Full transcript
Jaggers v. Ellis (Chancery Division) 11 November 1997
Income tax. Schedule D. Farming / woodlands.
The taxpayer grew Christmas trees. On a nine-acre site, coniferous trees
were planted: mainly Norway Spruce, but also two other species not normally
grown in woodlands. The trees were young and more closely spaced than
they would have been if grown for forestry purposes. They were specially
pruned to give a Christmas tree shape. The Special Commissioner found
as a fact that the land was not "woodlands".
The taxpayer was assessed under Schedule D on the deemed trade under
s.53(3) ICTA 1988. The taxpayer argued that the land she occupied was
"woodlands" within the meaning of s.53(4) ICTA 1988, in which
case she was exempted from the provisions of s.53(3).
Held: The Special Commissioner's finding of fact was not irrational.
The word "woodlands" fell to be interpreted according to its
normal English usage, and the Special Commissioner (who had viewed the
site) could not be said to have been irrational in deciding that the
site was not "woodlands", even though it was a site on which
trees were grown.
Aparna Nathan appeared for the taxpayer
Full transcript
EMI Group Electronics Ltd v Coldicott (Chancery Division)
22 October 1997
Income tax. Schedule E. PILONs (Payments in Lieu of Notice).
Two employees had notice periods of six months. The contract of employment
provided for PILONs to be made, saying "The Company reserves the
right to make payment of the equivalent of salary in lieu of notice."
The employees became redundant and were dismissed summarily; payments
in lieu of notice were made in accordance with the employment contracts.
The issue was whether such payments were emoluments from the employment
(s.19 ICTA 1988) in which case they were taxable, or not, in which case
they were in principle taxable under s.148 ICTA 1988 but with the benefit
of the £30,000 exemption under s.188(4) ICTA 1988.
Held: in the spectrum of types of payment, contractual PILONs fall
between deferred payments of salary, which are within s.19, and redundancy
payments, which are not. The fact, here, that the employment contracts
provide for the payments to be made is neither a sufficient nor a necessary
condition for taxability under s.19, but it is relevant. These PILONs
were taxable under s.19 as emoluments from the employment. Mairs v Haughey
[1994] 1 AC 303 distinguished.
Michael Flesch QC and Conrad
McDonnell appeared for the employer
Full transcript
See also Court of Appeal decision above
Ingram v I.R.C. (Court of Appeal) 28 July 1997
Inheritance tax. "Carve-out" leases. Failed implementation.
Lady Ingram had conveyed property to a nominee, who then purported
to grant her a lease of 20 year term. The freehold reversion was the
subject of a gift to beneficiaries. Lady Ingram then died. Held (Nourse
LJ, Evans LJ; Millett LJ dissenting): It was impossible for a person
to grant a lease to themselves. The grant of a lease by a bare trustee,
or nominee, was similarly impossible. The lease was a nullity. The gift
was a gift of the freehold with vacant possession, but subject to an
obligation in equity to give Lady Ingram rights and interests as if
the lease had been valid. Those rights and interests constituted a reservation
of benefit within the meaning of s.102 FA 1986 (Gifts with reservation).
Full transcript
Bricom Holdings Limited v I.R.C. (Court of Appeal) 25 July
1997
Relationship between a Double Taxation Convention and the controlled
foreign companies provisions. Section 747 and Schedule 24 ICTA 1988.
The taxpayer had a wholly owned direct subsidiary which was resident
in the Netherlands, but received UK source interest. It was accepted
that the subsidiary was a controlled foreign company so that the taxpayer
in the UK was chargeable to tax on its profits under s.747 ICTA 1988.
The taxpayer argued, however, that the charge to tax was excluded by
various provisions of the UK-Netherlands Double Taxation Convention
(1980).
Held:
(1) that Schedule 24, in making the assumption that the foreign company
is a UK resident company when in fact it is Dutch resident, does not
thereby allow the company to be treated notionally as a dual resident
company with the benefit of treaty exemptions;
(2) the profits attributed to the taxpayer under s.747 have lost their
character as the type of profits which would qualify for exemption under
the Convention - the actual foreign profits, which might have been exempt
from UK tax, simply provide the measure of the conventional or notional
sum which is apportioned to the taxpayer and on which UK tax is charged.
Andrew Park QC and Felicity Cullen
appeared for the taxpayer.
Full transcript
IRC v. Willoughby [1997] STC 995 (H.L.)
Tax avoidance through the transfer of assets abroad. Sections 739 and
741 ICTA 1988.
(1) On the natural meaning of the words used in s.739 the section
applies only to transfers of assets by individuals who are ordinarily
resident in the U.K. at the time of the transfer.
(2) The difference between tax avoidance and tax mitigation: in tax
mitigation, the taxpayer takes advantage of a fiscally attractive option
afforded by the legislation and genuinely suffers the economic consequences
that Parliament intended to be suffered by those taking advantage of
the option; in tax avoidance, the favourable tax regime is enjoyed but
the economic consequences are not incurred.
Here, there was investment in qualifying policies issued by non-resident
life offices (Sch. 15 ICTA 1988 - formerly Sch.2 FA 1975): a special
factor here was that the policy-holder could manage his own "portfolio"
of investments. Although investment units were notionally allocated
to him, he had no legal or equitable interest in the underlying investments,
but simply a contractual right to the benefits promised by the policy
- he was still suffering the economic consequences intended by Parliament.
Thus there was no tax avoidance - he was within the s.741 exemption.
David Goy QC and Philip
Baker appeared for the taxpayer
Full transcript
See also Article by David Goy Q.C. and Philip Baker
IRC v. McGuckian [1997] STC 908 (H.L.)
The Ramsay principle, as stated in Furniss v. Dawson [1984] STC 153,
allows tax legislation to applied to the substance of a transaction.
Steps inserted artificially with no commercial (business) purpose other
than tax avoidance may be disregarded. Whilst the steps inserted into
a scheme may have some business effect, the question is not what is
the effect of inserting the artificial steps but what is their purpose.
Andrew Park QC appeared for the Inland Revenue
Full transcript
See also Article by David Goldberg Q.C.
Tesco plc v. Crimmin (Inspector of Taxes) [1997] STC 981 (Ch
D)
Depreciatory transactions. Section 176 TCGA 1992 (formerly s.280 TA
1970).
The machinery of section 176 (reduction of allowable loss on a disposal
of shares in a company if the company has previously disposed of assets
at an undervalue to another group member) applies to reduce the allowable
loss after indexation - so the taxpayer does not retain the benefit
of the indexation allowance.
Andrew Park QC and Hugh McKay appeared for the taxpayer
Crawley Borough Council v. Bradford & Bingley Building
Society - UNREPORTED
Rectification. Loan documentation: interest clause. Composite rate tax.
Both parties to a contract were mistaken as to the tax regime which
applied. Section 476(5) ICTA 1988. Crawley Borough Council (the lender)
was entitled to have the contract rectified so that the net amount of
interest received would indeed be the rate of interest specified in
the original contract.
David Goldberg QC and John
Walters QC appeared for the taxpayer
Full transcript
McKnight v. Sheppard [1997] STC 846 (C.A.)
Mr Sheppard is a stockbroker. In the late 1980's he incurred legal costs
of £200,000 odd and had to pay a Stock Exchange fine of £50,000.
The costs were in respect of representation by Counsel and solicitors
before a Stock Exchange disciplinary tribunal and an appeal. Mr Sheppard
had been accused of various breaches of the Stock Exchange rules most
of which were not proved (and a later tribunal "substantially"
vindicated him).
The Special Commissioner found as a fact that Mr Sheppard had incurred
the legal expenditure to save his stockbroking business from destruction.
Accordingly, they were deductible under (what is now) s.74(1)(a) ICTA
1988. The fines were not deductible under s.74(1)(e) ICTA 1988 because
of IRC v. Alexander von Glehn 12 TC 232.
The Court of Appeal upheld the Special Commissioner's conclusion on
the legal fees (the fines were not in issue before the Court of Appeal).
Section 74(1)(a) posed a single test. There was no further test of sufficient
connection with the trade as Lightman J has suggested in this case.
Since the Special Commissioner had made the above findings of fact,
the only issue on appeal was whether that was a proper finding on Edwards
v. Bairstow 36 TC 307 principles.
David Goldberg QC and Hugh McKay appeared
for the taxpayer
R v. IRC, ex p. Ulster Bank Ltd [1997] STC 832 (C.A.)
Notices requiring a third party to produce documents, issued by the
Inland Revenue during tax investigations. s.20(3) TMA 1970.
The draft notices issued by the Revenue in this case were permitted
by s.20(8A) TMA since although the documents requested were conjectural
and described only in general terms, nevertheless they were described
in the notices within the meaning of s.20(8D) TMA; furthermore the requirement
for the consent of the Special Commissioner under s.20(8A) provided
a sufficient safeguard against the misuse of the Revenue's power in
this regard.
R v. O'Kane and Clarke, ex p. Northern Bank Ltd disapproved in part
David Goldberg QC appeared for the
taxpayer
Petition for leave to appeal to House of Lords refused
Bostock & others v. Totham (Inspector of Taxes) [1997]
STC 764 (Ch D)
Enterprise zones, Industrial Buildings Allowance. Section 21(1) CAA
1990.
Where an enterprise zone building was purchased after first use, and
the purchaser claimed industrial buildings allowance for the purchase
price of the property, only the "building" element of the
net purchase price paid, as opposed to the "land" element,
qualified for allowances. The disallowable "land" element
is to be found by a just apportionment of the price between the two
elements; in this case, it was just to apportion pro rata to the value
of the bare land and the construction cost of an equivalent new building
as valued at the purchase date.
John Walters QC and Conrad
McDonnell appeared for the taxpayer
Vodafone Cellular Ltd v. Shaw (Inspector of Taxes) [1997]
STC 734 (C.A.)
Deductible expenses. Section 74 ICTA 1988. A one-off payment to terminate
an onerous contract was deductible in computing profits for corporation
tax purposes. The payment was held to be of a revenue nature and was
wholly and exclusively for the purposes of the taxpayer's trade rather
than the trades of its subsidiaries.
Michael Flesch QC and Felicity
Cullen appeared for the taxpayer
Spectros International plc v. Madden (Inspector of Taxes)
[1997] STC 114 (Ch D)
Capital gains tax. Disposal consideration. Purchaser of company agrees
to discharge debt.
Spectros disposed of the common stock in its subsidiary SIH. The agreed
purchase price was $20,001,000, but at the time of purchase SIH had
a liability of $20 million to a bank; the money borrowed had previously
been paid to Spectros by SIH in the form of a dividend. The purchaser
agreed to discharge the liability to the bank, and in the event only
paid $1,000 for the common stock. On the facts in this case, the effect
of the sale agreement and related agreements was that the disposal price
of the common stock was indeed $20,001,000.
David Goldberg QC and Hugh McKay appeared
for the taxpayer
Walker (Inspector of Taxes) v. Centaur Clothes Group Ltd [1997]
STC 72 (C.A.)
Corporation tax. Accounting periods. "Within the charge to tax"
- s.832(1) ICTA 1988.
ACT paid on a dividend cannot be carried back and set against an earlier
year's corporation tax unless the dividend was paid in an accounting
period of the company (s.239(3) ICTA 1988). The taxpayer company ceased
trading on 6 January 1992 and accordingly an accounting period then
ended. No new accounting period started (s.12(2) ICTA 1988) unless the
company continued to be "within the charge to corporation tax".
The company had no source of income after 6 January 1992, with the result
that after that date it was not within the charge to corporation tax
and had no accounting period until 30 September 1993 when it placed
£2000 in an interest-bearing deposit account.
David Goldberg QC and Conrad
McDonnell appeared for the taxpayer
Upheld on appeal.
R v. O'Kane and Clarke, ex p. Northern Bank Ltd [1996] STC
1249 (QBD)
Notices requiring a third party to produce documents, issued by the
Inland Revenue during tax investigations. s.20(3) TMA 1970.
The notices were quashed on the grounds (a) that they required the
production of conjectural as distinct from actual documents and for
that reason were outside the scope of s.20(3) TMA 1970; and (b) that
they were oppressive and unfair in that they required production of
material which would be largely or wholly ignored by the Revenue.
N.B. Ground (a) above disapproved by the Court of Appeal in R v. IRC,
ex p. Ulster Bank Ltd [1997] STC 832; ground (b) left standing
David Goldberg QC and John
Walters appeared for the taxpayer
Re Taxpayer F1(1993) Special Commissioners – unreported
Schedule E - s.145 ICTA 1988 - s.168 ICTA 1988.
Shadow director. Offshore company. Whether individual whose wishes
directors tend to follow constitutes a shadow director: held: not. Whether
living accommodation provided to shadow director is subject to charge
under s.145 ICTA 1988: held: not.
Hugh McKay appeared for the taxpayer
Disapproved in R v Dimsey [1999] CA
Full transcript
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