BN66 - Court of Appeal and beyond

[geoff from contracta IOM]

Seems that the jury accepted that the payments were loans, even without a loan agreement, and that loans from a client are loans and not income...interesting.

It is only HMRC who seek to twist the logic, to a jury a loan is a loan is a loan

[DonkeyRhubarb]

Worth a read

This is the Hansard transcript of the debate on the 1987 legislation.

UNITED KINGDOM MEMBERS OF PARTNERSHIPS CONTROLLED ABROAD (Hansard, 15 July 1987)

Some notable quotes:

Tony Blair - "Parliament should oppose retrospective legislation, for a number of reasons. The principal democratic reason is that people are perfectly entitled to do whatever the law permits them to do and that it is wrong afterwards to make it unlawful."

Norman Lamont - "The type of retrospection on which the House has normally looked with disfavour is where the law is changed retrospectively so that people find themselves faced with unexpected and unprovided for tax liabiliies for past years. In this instance, retrospection is somewhat different...

...the purpose of retrospection in this clause is to prevent taxpayers from obtaining such a windfall tax advantage. It is not to inflict an unexpected tax charge on the unwary. I am sure that the House will want to think about the distinction that I have drawn between the different types of retrospection."

[DonkeyRhubarb]

And here is the best bit of all.

Norman Lamont - "As the professional press has pointed out, leaving the clause unamended would lead to loopholes that would be much exploited. However, I appreciate that that is not the Committee's main concern."

Do you grasp what he's saying here?

He is acknowledging that the clause (ie. the 1987 legislation) as drafted would lead to loopholes that would be much exploited but that was not their concern.

They knew they were leaving loopholes but they weren't bothered. All they were interested in doing was stopping thousands of taxpayers gaining a windfall as a result of the court case Padmore -v- IRC.

You could almost say that Parliament in 1987 gave a nod to our scheme.

[SLB]

And here is the best bit of all.

Norman Lamont - "As the professional press has pointed out, leaving the clause unamended would lead to loopholes that would be much exploited. However, I appreciate that that is not the Committee's main concern."

Do you grasp what he's saying here?

He is acknowledging that the clause (ie. the 1987 legislation) as drafted would lead to loopholes that would be much exploited but that was not their concern.

They knew they were leaving loopholes but they weren't bothered. All they were interested in doing was stopping thousands of taxpayers gaining a windfall as a result of the court case Padmore -v- IRC.

You could almost say that Parliament in 1987 gave a nod to our scheme.

Brilliant DR! Absolutely brilliant!

Would this be able to be used at the SC? I realise our case is very narrow and ONLY centres on the HR angle, but does this qualify under that heading?

[sjw]

It's a long shot but...

Should we invite Dave out for dinner before he 'retires'? I understand Ed Lester has had to cancel at the last minute...

And if that fails does anyone have Harry Rednap's solicitor's number?

[screwthis]

And here is the best bit of all.

Norman Lamont - "As the professional press has pointed out, leaving the clause unamended would lead to loopholes that would be much exploited. However, I appreciate that that is not the Committee's main concern."

Do you grasp what he's saying here?

He is acknowledging that the clause (ie. the 1987 legislation) as drafted would lead to loopholes that would be much exploited but that was not their concern.

They knew they were leaving loopholes but they weren't bothered. All they were interested in doing was stopping thousands of taxpayers gaining a windfall as a result of the court case Padmore -v- IRC.

You could almost say that Parliament in 1987 gave a nod to our scheme.

Does this not confirm beyond all doubt that Parliament did NOT intend that the original 1987 Act would apply to our scheme.

And if so without this 'clarification' piece, would their version of events stand up at all in a court?

[Disgusted of Coventry]

...[Norman Lamont] is acknowledging that the clause (ie. the 1987 legislation) as drafted would lead to loopholes that would be much exploited but that was not their concern.

They knew they were leaving loopholes but they weren't bothered. All they were interested in doing was stopping thousands of taxpayers gaining a windfall as a result of the court case Padmore -v- IRC.

Good grief!

A "wide precedent", then! To say the least.

[SantaClaus]

Brilliant DR! Absolutely brilliant!

Would this be able to be used at the SC? I realise our case is very narrow and ONLY centres on the HR angle, but does this qualify under that heading?

If it's not admissible at the SC, when the time comes, you can bet I will use it at my own tax tribunal.

[DonkeyRhubarb]

Does this not confirm beyond all doubt that Parliament did NOT intend that the original 1987 Act would apply to our scheme.

And if so without this 'clarification' piece, would their version of events stand up at all in a court?

HMRC would never (I repeat NEVER) have taken the scheme to court on the basis that it was caught by the 1987 legislation. They would have been laughed out of court.

Remember, in all the letters they sent us in the years prior to BN66 they never once mentioned Padmore or 1987. They referred to other bits of tax law but never the 1987 Act.

And forget the word "clarify". There isn't a single occurrence of this word throughout the whole CoA judgment. The judges recognised BN66 for what it really was ie. a retrospective amendment (change).

[screwthis]

HMRC would never (I repeat NEVER) have taken the scheme to court on the basis that it was caught by the 1987 legislation. They would have been laughed out of court.

Remember, in all the letters they sent us in the years prior to BN66 they never once mentioned Padmore or 1987. They referred to other bits of tax law but never the 1987 Act.

And forget the word "clarify". There isn't a single occurrence of this word throughout the whole CoA judgment. The judges recognised BN66 for what it really was ie. a retrospective amendment (change).

So with this in mind and referring back to one of your recent posts, the court would then surely accept b)


(2) It applies to the distinctive elements/features of the case. A lot depends on which of the following the court accepts:

a) Parliament always intended that the 1987 legislation should prevent this type of DTA tax avoidance, and therefore all BN66 does is tighten up the drafting on the statute books so that the original law has the effect Parliament clearly intended at the time. This would only set a narrow precedent.

b) Parliament only ever intended that the 1987 legislation should prevent taxpayers gaining a backdated windfall by filing identical claims to Padmore et al. It was never intended to target other arrangements and therefore BN66 changes the original law in a way that Parliament never intended at the time. This would set a wide precedent.