Press Room

6 Jun 2022

Andersen LLP – Tax News June 2022

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Andersen LLP

June 2022

A lot can happen in the space of two months (since our last newsletter). The European Partner Conference took place in Berlin at the beginning of May having been postponed on a number of occasions thanks to our old friend COVID-19. There was no stopping us this time and the sense of relief and happiness to actually meet colleagues in person and share a beer and a laugh was palpable. The conference was very well attended, with over 250 partners from across the continent.

Our German hosts put on a great show of hospitality, the highlight of which was bottomless champagne and first class canapés at the historic KaDeWe department store’s food hall.

It reminded me of the first partner conference I attended as a guest of Andersen in Barcelona some 5 years ago. To be honest I wasn’t really looking forward to the event, thinking it would be a typical “tax bod” get together. I couldn’t have been more off the mark – I was taken aback by the warmth of the welcome and the genuine notion that Andersen is a family. This sense of togetherness and pride in the history of the firm was quite striking.

We have just spent the past two days at our Slovenian members’ conference in the beautiful seaside town of Portoroz. Zoe gave a masterclass lecture on crypto and blockchain to an enraptured audience (contact her if you would like a copy of her slide deck), proving she really is the crypto queen!  I took part in a panel discussion about sustainability and taxonomy closing the first day’s proceedings. I surprise myself sometimes! Again, our hosts, Senica, were fantastic, especially in their enthusiasm for imbibing me with various types of local grappa and schnapps!

We’re now en route to Pula in Croatia for a few days R&R with our daughter Bellamy (her third tax conference in the bag) full of positivity and pride at being part of the Andersen family.

So, to this month’s newsletter which I hope you enjoy reading as much as I enjoyed editing it. As usual, all feedback, comments and questions are gratefully received.

Miles Dean
Head of International Tax
Andersen LLP


The UK

Exchange of Information – MAC the Knife – Andrew Parkes

Tax Schemes – Remuneration Trust Too Good to Be True – Andrew Parkes and Andrew M Park

Income Tax – Basis Period Reform – Anthony Lampard

Real Estate

Capital Allowances and Property Transactions – Huw Griffiths

Private Clients

Inheritance Tax – Implications for an individual changing their domicile of choice – Anthony Lampard

Tax Dispute Resolution

Professional Negligence Decision in Favour of A Thornhill QC – Andrew M Park

The UK

Exchange of Information – MAC the Knife

We were reminded recently as to how the world is getting smaller when we were asked a query regarding HMRC’s ability to obtain information.

By now, we believe everyone knows that tax authorities exchange information for various reasons and via various routes, but perhaps not so many people are aware of the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters aka the MAC – we know the letters are the wrong way round, but CMAA doesn’t roll off the tongues of tax officials as well.

This is a multilateral agreement from way before they became fashionable with the multilateral instrument.

It is a way for countries to agree to exchange information, collect each other’s tax debts and serve documents, although most countries do opt out of the debt collection and document service parts (for obvious reasons!).

I did it my way

Why does it matter, we hear you cry! Well, although the UK has a wide-ranging treaty network, and also a number of Tax Information Exchange Agreements where there isn’t a full treaty, there are still gaps. The MAC fills some of these gaps, possibly most notably for Brazil and the Seychelles. The latter might strike you as being somewhat obsolete on the basis Seychelles is oh so 80s when it comes to tax. However, with the emergence of crypto/fintech/blockchain, Seychelles has repurposed itself and is very much de rigeur in these circles.

So, just because there isn’t a treaty doesn’t mean that HMRC can’t find out what they want to know.

If you have any queries about exchange of information, please contact Andrew Parkes:

Andrew Parkes
National Technical Director
M: +44 (0)7522 229 589 or

The UK

Tax Schemes – Remuneration Trust Too Good to Be True

Reports of tax cases involving marketed avoidance seem to come and go in waves. We had a series of cases involving NT Tax Advisors, which HMRC won, and now we seem to be on a run of cases involving the [insert adjective to taste] Mr Baxendale-Walker, although to be fair, issues involving BW have been rumbling on in the background for many years and involve quite a bit more than tax – forgery, bankruptcy, planning, negligence, etc.

We are interested in three recent decisions and HMRC’s settlement offer for so-called remuneration benefit trusts which, in their latest iteration, were still being marketed last year. As ever the arrangements, if we can call them that, were “tweaked” from time to time in an attempt to get around the relevant rules. The rules in question are the disguised remuneration provisions found in Part 7A Income Tax (Earnings and Pensions) Act 2003.

When is a victory not a victory?

In the case of Marlborough DP Ltd v HMRC [2021] UKFTT 0304 (TC) the taxpayer’s appeal was allowed. Whether you would call it a Pyrrhic victory or a hollow one is debatable – what isn’t up for debate is that the scheme failed, the issue was how badly. Of course, if you’re due to be hung, drawn and quartered, perhaps only being hung is worthwhile.

The general idea behind the scheme was that your company would set up a trust whose assets would be available to reward persons who would help the business of the company, thus enabling the company to get a deduction on payments to the trust.

The trust would appoint a company controlled by the user of the scheme (usually the UK resident shareholder of the company) as a fiduciary with all the necessary powers to deal with the assets of the trust but none of the responsibilities. The fiduciary company would then lend the money to the user.

This was said to lead to the Holy Grail of tax planning/mitigation/avoidance – the company gets a deduction for the payment, no Inheritance Tax is due upon the payment to the trust, and the loan from the fiduciary company would not be taxable upon the user, who would never have to pay it back.

It won’t come as any surprise to find out that HMRC did not agree with this! By the time of the enquiry, the taxpayer didn’t either. They accepted being hung by treating the payments as distributions such that no Corporation Tax (CT) deduction was due and the taxpayer was taxed upon the income.

However, it looks as if HMRC were going for drawing and quartering by arguing that the payment was within the disguised remuneration rules such that a CT deduction still wasn’t due, income tax was due at the higher “normal” rates and also National Insurance.

The Tribunal agreed with the taxpayer and he was despatched swiftly.

Interestingly, or perhaps not, the IHT position was not covered – this is so because the trust was supposed to be a discretionary trust and the payments to it were presumably relevant property. However, the RBT settlement opportunity published by HMRC gives a clue here – it presupposes that such trusts were either set up incorrectly, or implemented such that the money never actually went to the trust and everyone can quickly, and with a sigh of relief, draw a veil over this part of the scheme.

A definite loss

Another iteration of the underlying scheme came before the First Tier with the decision being released on 1 December 2021 in the case of Strategic Branding Ltd v HMRC [2021] UKFTT 0474 (TC). Interestingly, although the taxpayer had used the scheme from 2012 to 2019, only 2012 to 2015 were being heard. This could be that the later years were still being enquired into, although HMRC would normally try and get all years closed and heard at a hearing, or could it be that a GAAR penalty could be charged for 2016 so the taxpayer quickly dropped those years? We’ll probably never know.

Here, the FTT “went another way”. How much of that was down to the taxpayer involved is certainly a question. The director’s evidence was held to be unreliable and some of it dishonest.

The payments by the company were not distributions, and were not allowable as they were not wholly and exclusively for the trade of the company. To put the nail in this particular coffin, the FTT then found that even if the payments were wholly and exclusively for the trade they would still be disallowed as payments to an employment benefit scheme. There was an interesting comment here as regards the RBT too. The Judge acknowledged that the trust deed did not allow the director to benefit, but the overall scheme was definitely to benefit him and therefore the RBT was an employee benefit scheme. An example of a judge applying substance over form, or possibly the Ramsay doctrine, “The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.”

The taxpayer could possibly take some cold comfort that the Judge did hold that the payments were not earnings. However, they fell within the disguised remuneration rules, so charged as employment income in any event.

More of the same

A third decision was released on 4 May 2022, CIA Insurance Services Ltd v HMRC [2022] UKFTT 144 (TC). This judgement was given by the same Judge as in Strategic Branding, so it may not come as any surprise that the taxpayer was despatched the same way.

This may be partly due to the director who gave evidence for the taxpayer being found to be unreliable and not credible as a witness. Something else the decision had in common with Strategic Branding.

Strategic withdrawal

Admittedly, defeats two and three were to the same Judge, so not as compelling as defeats by different jurists, but overall, if you or a client has used a Baxendale Walker trust then you need to look very carefully at HMRC’s settlement opportunity.

You do have to move quickly though, as the opportunity is only open to 31 July 2022.

All that said, the opportunity is not the be all and end all. As mentioned above, these structures have, generally (in our experience), not been implemented correctly. In some cases that could work for HMRC, if the errors bring extra tax into the picture, but potentially they could work for the taxpayer or at least leave them flat.

If you have any concerns around remuneration benefit trusts contact one of the Andrews:

Andrew Parkes
National Technical Director
M: +44 (0)7522 229 589 or

Andrew M Park
Tax Investigations Partner
M: +44 (0)7956 715 098 or

The UK

Income Tax – Basis Period Reform

The Finance Act 2022 which received Royal Assent in February 2022, includes legislation to amend basis periods for income tax purposes. The driver for this, which will apply to sole traders and partnerships, is to simplify income tax administration in advance of the commencement of making tax digital.

The intention is that whilst businesses can retain their current year end, or amend it in the light of these changes, there will be a consistency in working out the taxable profits for all self-employed individuals. These will be based on taxable profits for the relevant fiscal year.

Who is affected?

Any individual or partnership that does not either currently have a 31 March or 5 April year end.

When do the changes apply?

The changes are twofold: 

  • A transitional period – for 2023/24 i.e. 6 April 2023 
  • New rules apply – from 2024/25 i.e. 6 April 2025 

Transitional Period

This will be made up of two separate periods:

  • Standard period – accounts to the end of the taxpayer’s normal accounting period. For this example – 31 December 2023
  • Transitional period – 1 January 2024 – 5 April 2024. Calculated on an average daily profit for that period.
  • The current overlap profits will be offset against the transitional period profits.
  • If the net transitional period shows a profit, after deducting the overlap profits, then the taxpayer can spread these profits equally over a period of up to 5 years. However, each taxpayer can advance the profits taxed in a specific year and where the business either ceases or the individual retires, then any remaining profits are taxed in the year of cessation.
  • Where there is an overall loss during the transitional period, this can be offset initially against the profits of the standard period. Where the losses exceed the standard period profits, then terminal loss relief can be claimed.  

Taxable Profits for 2024/25

For this year, if the business retains their 31 December year end, the taxable profits will be as follows:

  • 31 December 2024 – 9 months profit
  • 1 January 2025 – 31 March 2025 – 3 months profits for the year to 31 December 2025

Changing of Accounting Period 

  • Many businesses may want to alter their accounting date. However, this will not be possible if they have done so previously in the last 5 years or alternatively where the new accounting period exceeds 18 months.
  • If these constraints can be avoided, then businesses should avoid changing their accounting date until 2023/24. To do so earlier impacts the ability to claim the spreading provisions for the transitional period.
  • Capital Allowances are going to be claimed based on expenditure incurred during the tax year, not based on the accounting year. May this be a driver for changing the accounting year end? 

Practical Issues

  • In calculating the transitional profits and whether to spread them – consider the possibility of tax rates changing.
  • The transitional profits will impact the scope to pay pension contributions. 
  • Where the business retains its current year end, how to estimate the taxable profits for the rump, especially where the accounting year has not yet finished, or it is a seasonal business such as farming or a hotel?  
  • How will estimated profit figures be amended? Do you amend the relevant tax return or adjust it via the following year’s tax return? 
  • How will these rules apply for international partnerships, where the scope to amend their accounting year end, may not be an option? 

These are a selection of issues that HMRC and the profession are discussing to see how best to deal with.

Future Plans

  • Making income tax digital – this applies from 6 April 2024 for sole traders and unincorporated landlords; this deadline is extended by one year for partnerships.
  • There is a need to make quarterly returns where the gross income exceeds £10,000 (and combined if have two businesses) and report income and expenses digitally. These will be initially accounting records, annual reports for both accounting and income purposes and the need to report the tax figures on the individual’s tax return. 
  • Although not currently proposed, it is expected that quarterly tax payments will be introduced in the future. This will reduce the current cash flow benefit for self-employed individuals compared with employees.  

If you want to discuss further, please contact Anthony Lampard:

Anthony Lampard
M: +44 (0)7983 927 096 or

Real Estate


Capital Allowances and Property Transactions

Some leaks cannot be patched up easily!

When a UK business acquires property, the buyer and their advisers may prioritise the VAT and Stamp Duty Land Tax considerations as these taxes can represent immediate and, potentially, material tax costs to be addressed on or shortly after completion.

Tax relief may arise to a purchaser on a property transaction in respect of pre-existing qualifying construction costs and fixtures in the form of capital allowances which can be used against the buyer’s taxable profits. The nature of the underlying expenditure will determine the rate at which the tax relief will arise to the buyer (see details below).

The purpose of this article is to help identify the importance and value of these allowances and to avoid pitfalls and missed opportunities to reduce the overall costs of the acquisition.  It does so in the context of an acquisition of property involving a buyer and a seller, although the issues raised are also relevant in lease transactions.

While some missed opportunities can be rectified after completion this may require the cooperation of the seller. This will always be easier to obtain during a deal rather than afterwards!

What are capital allowances?

Where a business incurs expenditure of a capital nature, these expenses are not deductible from profits for tax purposes because they have an enduring benefit for the business.  This treatment prevails irrespective of whether the costs are capitalised to the balance sheet or expensed through the income statement.

Instead, tax relief is usually given in the form of capital allowances. These may take many forms and while there are other forms of allowances such as annual investment allowance, the ‘Super-deduction’ and Business Premises and Renovation Allowances, these allowances are typically given at a rate of at least 100% of expenditure and so not be available to a future buyer and so these allowances are not considered further as part of this article – instead the focus is on plant and machinery allowances and structures and buildings allowances.

To be able to claim capital allowances the buyer must be a business undertaking a qualifying activity which covers trading, property and the management of investments.

Where a purchaser or seller is not undertaking a qualifying activity (because they are a charity or a pension fund for example), this does not mean that capital allowances should be disregarded completely. Such purchasers should also consider the rules so that the capital allowances position is effectively ‘frozen’ at the date of acquisition which results in them being available to a buyer on a subsequent acquisition (which in turn may result in increased value being received for the fixtures).

Plant and machinery allowances (PMAs)

Annual writing down allowances may be claimed on qualifying plant and machinery assets.  While most plant and machinery assets will qualify for capital allowances for the main rate of 18% per annum on a reducing balance basis, certain integral features assets (e.g., lifts as well as electrical, cold water and heating systems) and long-life assets which have a total useful life of at least 25 years qualify for the special rate of 6% per annum on a reducing balance basis. Together these are referred to as PMAs.

Structure and buildings allowances (SBAs)

Introduced with effect from 29 October 2018, SBAs provide relief on eligible construction costs arising after this time. These costs typically comprise expenditure on structural assets (which will not be plant and machinery assets) such as offices, factories and retail premises.  Where the conditions are met, a person may be entitled to claim SBAs which are typically given at 3% of the qualifying costs on a straight-line basis.

Among the conditions for SBAs to be claimed is the requirement for the person who incurred the capital expenditure to make an allowance statement setting out prescribed information such as the amounts of qualifying expenditure as well as the dates of the first construction contract and when the assets were brought into qualifying use.

Capital allowances and property transactions

Plant and machinery assets may be fixtures which become part of the adjoining structure for land law purposes and so while title to these assets will transfer to a buyer, there are requirements to be met for the buyer to claim PMAs in relation to these assets. The extent of these requirements is largely contingent on whether the seller was entitled to claim allowances (because of carrying on a qualifying activity).

Where the seller was entitled to claim allowances there are two key requirements to be met in relation to the acquired fixtures.

i) The fixed value requirement

This requirement will typically be met where buyer and seller agree the value of fixtures via an election.  The value determines the disposal value for the seller and the acquisition value for the purchaser and so mitigates the risk of any double counting of allowances on the same underlying expenditure.  Alternatively, the fixed value requirement can be met by determination by the First Tier Tribunal.

This election is irrevocable and must be entered into jointly by seller and purchaser and must be provided to HMRC within two years of completion. This document is ordinarily part of the sale and purchase agreements.

Values ascribed to the main pool and special rate pool fixtures in an election will determine the future allowances available to a purchaser, but can determine whether a seller suffers a claw back of allowances claimed. These values therefore form part of the overall negotiation.

ii) The pooling requirement

This requires that the seller must have allocated the assets in a capital allowances pool in a tax return prior to the transaction. Ordinarily, sellers undertaking qualifying activities will have included expenditure incurred on fixtures in the relevant pools in their tax return meaning the requirement is met; however, the seller should always warrant this position.

Where the seller cannot claim allowances (e.g., they’re a charity) then there are different requirements to be met before a buyer can claim allowances:

  1. For fixtures in situ when the seller acquired the building it may be possible for the acquirer to access PMAs, but this may require additional work to seek the necessary information from the previous owner. 
  2. For fixtures acquired during the period of the seller’s ownership, it is possible to undertake an analysis of the property to attribute part of the purchase price to qualifying fixtures.  This exercise should be undertaken by a capital allowances specialist so that a just and reasonable apportionment of the purchase price is made to fixtures qualifying for PMAs.  Any apportionment in the sale contract will not be valid for PMA purposes unless it can be proven to be ‘just and reasonable’.

The balance of any SBA may be transferred to a purchaser, but again there are conditions to be met – importantly they must obtain the allowance statement made by the seller when making SBA claims otherwise their entitlement to any future allowances will be lost.

How Andersen can help

To mitigate the leakage of allowances Andersen can:

  • work alongside your legal advisors to ask the right questions and understand the tax history of the assets and unlock hidden value;
  • undertake review of sale documentation to identify opportunities and mitigate risk in relation to capital allowances through the inclusion of warranties and indemnities in the sale and purchase agreement;
  • advise businesses/organisations not entitled to capital allowances (eg charities, pension funds and property developers) to preserve and enhance their asset values and so realise higher returns;   
  • work with you to understand the assets required and whether allowances can be unlocked; and 
  • assist with ongoing tax compliance obligations including the preparation of tax returns in which the allowances are included.

For more information, please contact Huw Griffiths:

Huw Griffiths
T: +44 (0)20 7242 5000 or

Private Clients

Inheritance Tax – Implications for an individual changing their domicile of choice

In this article we look at a taxpayer who has a domicile of origin in the UK, normally based on their father’s domicile status at the time they were born. Where the parents are not married, then the child’s domicile of origin will be that of their mother.


An individual can only have one domicile at a time. It is like putting down deep roots making it much more difficult to change your domicile status, compared with tax residence, where an individual can be resident in more than one country in the same tax year.

A taxpayer can argue that they have acquired a domicile of choice in another country. However, to do so, they must satisfy two conditions. Firstly, there is a need to break all ties with the country that they have their domicile of origin with, whilst secondly moving to and residing in the new country with the intention of remaining there permanently or indefinitely. It is up to the individual to be able to demonstrate to HMRC that they have acquired a domicile of choice.

Implications of failing to change their domicile status

Failure to do so will mean that even though the individual has lived and worked abroad for many years, they are still viewed as UK domiciled for Inheritance Tax (IHT) purposes. The impact is that they are liable to IHT on their net worldwide assets, with credit for any foreign estate taxes that may be borne.

There may be unexpected IHT liabilities if they create an overseas trust when it is argued that they are UK domiciled. In addition, there may be double taxation where the settlor or spouse is a beneficiary of the trust. The trust may also be liable to 10 year and exit charges together with the necessity that the Trust is registered with HMRC.

Successfully acquiring a domicile of choice overseas

This may restrict IHT to the net value of UK assets only. It is irrelevant whether the individual is UK tax resident or not, when considering UK IHT. If there is a UK asset in the estate, IHT may need to be considered.

Equally if there is UK residential or commercial property, owned directly or indirectly, then there is still UK capital gains to consider, even where the taxpayer is non-UK resident. There is a need to report and pay the tax to HMRC within 60 days of the completion of the transaction.

One factor to keep in mind: where an individual has either a domicile of origin, or is viewed as deemed domiciled for UK tax purposes (because they have spent at least 15 of the last 20 tax years, preceding the relevant tax year in the UK), then any gifts made within 3 years of their departure will still be liable to IHT if made to a trust or may be a potentially exempt transfer (PET) if made to another individual (other than normally the spouse of the donor).

What happens if an individual moves to another overseas country without returning to the UK?

As highlighted above, it is not as easy to change an individual’s domicile status as it is their residence status for tax purposes. When an individual leaves the country where they claim to have acquired a domicile of choice, they are viewed as having reacquired their domicile of origin; it is said to revive. Therefore, from an IHT perspective, the individual will be liable to tax on their worldwide net assets, until they have been able to show that they have acquired a new domicile of choice.

It is possible to create a new domicile of choice, although this will take some time to achieve. On the basis that one needs to be able to satisfy HMRC on this point, an individual should expect to have the situation closely scrutinised, especially if their estate is significant. This will certainly be of interest were a person to die soon after moving countries.

If it can be satisfied that the individual had acquired a domicile of choice in the first country they moved to, then any Overseas Trust should remain outside of UK IHT, such as 10 year and exit charges, so long as the trust has no UK assets. However, there may still be an exposure where it is argued that the settlor has retained an interest in the assets transferred to the Trust. If that is the case, then the assets may remain within the individual’s estate even though they are formally owned by the overseas trustees.

Formerly Domiciled Residents (FDR) returning to the UK

This applies where an individual has a domicile of origin that they have given up having acquired a domicile of choice overseas. They subsequently return and become resident again in the UK.

In these circumstances, the FDR is treated as being UK domiciled for all taxes including IHT. The impact is that any overseas trust that is created, will not retain the UK tax benefits that it enjoyed when the individual was overseas, nor will it benefit from the protected trust status, which defers UK tax until a distribution is received from the trust. The Protected trust status applies for overseas trusts created by UK resident, non-domiciled individuals prior to them becoming deemed domiciled.

Final thoughts

When a UK individual with a domicile of origin moves to a country with a state system, then this can add further complications. Three examples are Canada, Australia, and the US. In those circumstances, an individual acquires a domicile of choice in a particular state and so, where they move, over time, between different states, this can have unexpected consequences; namely, reacquiring a UK domicile of origin.

We are already seeing HMRC enquiring into taxpayers’ domicile status and we can expect this to increase over time, as the tax involved can be significant.

Next steps

If you feel that this is an area that you would like reviewed or to discuss how best to be proactive to manage any future challenge, then we would be very happy to meet and discuss with you. 

If you have any questions re the above, please contact Anthony Lampard:

Anthony Lampard
M: +44 (0)7983 927 096 or

Tax Dispute Resolution

Professional Negligence Decision in Favour of A Thornhill QC

Participators in marketed tax avoidance arrangements have had a dismal time of late.  Further to landmark cases – like RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc) v Advocate General for Scotland – and a more purposive and arguably equity-based change in the judiciary’s approach, HMRC’s current success rate in litigating avoidance cases now stands north of 90%.

Given the spectacular success of HMRC in litigating against schemes it is little wonder that many participators now feel they were mis-advised at the outset. Having lost their battles with the taxman some are now seeking recompense against advice they feel they should have been entitled to rely upon. However, the latest professional negligence case against Andrew Thornhill QC – D McClean and Others v A Thornhill QC [2022] EWHC 457 (Ch) – has not gone the way the claimants hoped. Indeed, the High Court gave them short shrift.

In any negligence claim, against a professional or otherwise, claimants must demonstrate four fundamental things:

  1. duty of care – a duty of care was owed by the other party to the claimant;
  2. breach – such a proven duty was breached;
  3. damages – a loss was suffered by the claimant as a result of the breach;
  4. causation – the loss suffered was a direct one sufficiently proximate to the breach.

Even where the four tests are met, complex limitation rules also apply which can leave claimants time-barred from obtaining redress.

In this instance, the 110 claimants who had invested in the Scotts Atlantic Distributors film schemes via Independent Financial Advisers, argued with 10 sample claims that Mr Thornhill’s consent in 2003/04 to allowing a copy of his opinions to the sponsor of the schemes to be made available to potential investors amounted to an assumption of a duty of care to them and that he breached that duty, causing them to lose the majority of their investments when HMRC later rejected the schemes.

The claimants were found to fail all the tests – even the first one. The Judge found that it was not reasonable for investors to rely upon Mr Thornhill instead of their own professional advisers, and it was not reasonably foreseeable by Mr Thornhill that they would do so. Even if a duty had been owed, the Judge held that such a duty would not have been breached.

What is more, many of the claims would have failed anyway on limitation grounds. The Judge rejected the argument that causation had not arisen until the claims were rejected by HMRC (on the basis that they were only contingent until that point) and he rejected arguments that any continuing duties kept the window open.

On a broader point – beyond the specifics of this case, the saga and that of so many other schemes similarly advised upon by so many other eminent Counsel, serves as a salutary reminder that even the most distinguished QCs can only seek to interpret the vagaries of the law like everybody else.  Their intellect, knowledge and experience of the courts make them more likely to be right in their conclusions more often. However, they are not magic divining rods. This is particularly so where many marketed avoidance arrangements are concerned in light of the recent sea change in the collective mindset of the judiciary against anything they regard as contrived or designed to rely on narrow literal statutory interpretation to achieve outcomes judges might find morally perverse.

For good or ill, in the current environment taxpayers and their advisers must now consider before embarking on any arrangement to avoid, mitigate or defer UK tax whether it deserves to succeed as well as whether it technically should.  If not, and QC’s opinion or not, they must accept a realistic likelihood that the judiciary will look for a way to make the arrangement fail were it to come before the courts.

Please contact Andrew M Park for additional information with respect to this article:

Andrew M Park
Tax Investigations Partner
M: +44 (0)7956 715 098 or

Andersen LLP, 80 Coleman Street, London, EC2R 5BJ

Tel: +44 (0)20 7242 5000
Fax: +44 (0)20 7282 4337  |