BN66 - Time to fight back!!!

[DonkeyRhubarb]

CIOT stance on "Clause 55"

Just stumbled on this.

Clause 55 – UK residents and foreign partnerships

We believe that the measure contravenes the EU law principle of preservation of legitimate expectations, and, in the case of partnership interests not constituting a definite influence, would breach the free movement of capital of the EC treaty, including in third country situations i.e. where the relevant treaty is with a non-EU country. The standstill protection of Article 57 would not in our view be available.

http://www.icaew.com/index.cfm?route=158663

(NB. for some reason the above link doesn't always work)

[ASB]

Just stumbled on this.

Clause 55 – UK residents and foreign partnerships

We believe that the measure contravenes the EU law principle of preservation of legitimate expectations, and, in the case of partnership interests not constituting a definite influence, would breach the free movement of capital of the EC treaty, including in third country situations i.e. where the relevant treaty is with a non-EU country. The standstill protection of Article 57 would not in our view be available.

http://www.icaew.com/index.cfm?route=158663

(NB. for some reason the above link doesn't always work)

Some time ago Marks and Spencer launched a VAT cased based on reclaim of some VAT which had previously been denied. This was based on time of claim.
The government the specifically legislated in a way which would deny the claim. M + S then appealed and eventually won - based on their alternate appeal ground of legitimate expectations.

http://www.finance-magazine.com/disp...?i=2590&pi=116

There do appear to be some significant similarities.....

[DaveB]

The argument from HMRC will be that as you live and work in the UK and consequently enjoy the benefits of that situation, can you then have a reasonable expectation *not* to pay tax on earnings generated in the UK?

[DonkeyRhubarb]

The argument from HMRC will be that as you live and work in the UK and consequently enjoy the benefits of that situation, can you then have a reasonable expectation *not* to pay tax on earnings generated in the UK?

Enjoy the benefits of living in the UK under a labour government? You must be having a laugh!

But if that's their argument they should have litigated years ago. Jane Kennedy was pressed several times by the Committee as to why HMRC had not litigated and she just side-stepped the question each time. Why? Because there is no answer to that.

[DaveB]

Enjoy the benefits of living in the UK under a labour government? You must be having a laugh!

But if that's their argument they should have litigated years ago. Jane Kennedy was pressed several times by the Committee as to why HMRC had not litigated and she just side-stepped the question each time. Why? Because there is no answer to that.

They probably should have done, but thats not going to be much of a defence if/when it comes to court. HMRC will make this argument since it is a nice headline grabber, sums up their position nicely and is guarenteed to get Joe Public on side.

[DonkeyRhubarb]

They probably should have done, but thats not going to be much of a defence if/when it comes to court. HMRC will make this argument since it is a nice headline grabber, sums up their position nicely and is guarenteed to get Joe Public on side.

I agree that the "public interest" angle is their best (and maybe only) argument. Jane Kennedy more or less conceded this point in a letter that was forwarded on from my MP. There is not much point debating this further as it's now up to the courts to decide.

[DonkeyRhubarb]

PS. I'm not too worried about my own position as I've got the liabilities covered. I always accepted that there was a risk the scheme would fail and made provisions accordingly. However, there are a lot of families who, for one reason or another, did not make any contingency plans. Others may have no sympathy for them but I do, particularly where there are children involved.

[smalldog]

The argument from HMRC will be that as you live and work in the UK and consequently enjoy the benefits of that situation, can you then have a reasonable expectation *not* to pay tax on earnings generated in the UK?

Yes on the basis of following the letter of the legislation. If thats what it allowed us to do, then thats what it allowed us to do. Not our fault it was flawed legislation as a number of MP's and committee members have pointed out to the treasury. Retrospective legislation cant be used just to paste over the cracks in a badly worded piece of legislation. That is not the basis on which this or any other government wants to be judged. Otherwise nobody will want to invest or live here. If this gets through then there will be a cloud forever hanging over businesses, private individuals etc that the government can, at will backdate any goddam clause they want to any given point in time. Rendering a huge number of businesses or individuals owing a lot for something they could not have foreseen..Foreseeing a change prospectively is one thing, you can prepare and plan for that, you cant prepare for retrospective, as who knows how far back it will go.

That is legitimate expectation as per protocol 1, and on the basis of retrospective the government cannot say they provided legitimate expectation of a clause dating back to 1987, 2004 was alluded too. But even in that context Dawn Prim at the time never stated it would become legislation in 4 years so even that cant be seen as being legitimate expectation.

They're F**ked me old china

[smalldog]

I agree that the "public interest" angle is their best (and maybe only) argument. Jane Kennedy more or less conceded this point in a letter that was forwarded on from my MP. There is not much point debating this further as it's now up to the courts to decide.

and is it in the public interest to spend their money on a legal case they might lose as they are already so broke?

[DonkeyRhubarb]

and is it in the public interest to spend their money on a legal case they might lose as they are already so broke?

Someone told me there is no internal accounting within HMRC so it doesn't "cost" them anything to fight a case unless they have to use external resources. In the Arctic case, they used their own in-house legal team so there was no cost. Of course, they did lose that one!