BN66 - Court of Appeal and beyond

[Tax_shouldnt_be_taxing]

The problem is s58 is now the law.

The courts don't care how it came to pass, and they have ruled that it doesn't conflict with any EU conventions or treaties.

HMRC is required to implement the law.

DR, should be easy to implement since they wrote it...

Still incedulous that (allegedly) HMRC read their own briefing notes from 1987, decided that the meaning and application they made was wrong and simply pretended that nothing could be further from the truth. Re-invented retrospection to give it the meaning that Parliament clearly stated was not the intent and also stated in the Inland Revenue briefing notes on Clause 62, went to Jane Kennedy with the new version and it became so. Don't you just love democracy?

[moira under the stairs]

Well, if you want to really get angry then have a look at these direct quotes. BTW ITTOIA 2005 is one of 2 legislative reasons why the scheme apparently fails:

ITTOIA 2005 – Annex 1 Change 145
This makes it clear that:
It was intended, in the case of income tax, that the 1987 legislation should do no more than remove the exemption claimed in the Padmore case.

And:
Section 858(2) of this Act makes it clear that it is only the partner’s chargeability to tax that is preserved, overriding any provision to the contrary in a double taxation treaty. No other effect of the treaty is overridden.

So nowt about Padmore 1987 doing anything beyond Padmore. Not a word about any other version of such a scheme being dealt with. But surely as the HMRC witness snippet states, Parliament intended the legislation to catch other similar schemes? Well, check this direct quote from one Tony Blair from the Padmore debate in 1987:

"Therefore, Clause 62 is before us and reverses the decision in Padmore. It ensures that the united Kingdom resident partner of a Jersey resident partnership is no longer exempt".

But just in case there is scope for wider application, Norman Lamont said:

"As the professional press have pointed out, leaving the clause unammended would lead to loopholes that would be much exploited. However I appreciate that that is not the Committees main concern."

So, nope, nothing to indicate anything wider in purpose. In fact in the paragraph before this extract, Lamont makes it very clear to whom the new legislation applied:

"Therefore, during that period a large number of admittedley restricted class of person - partners in foreign partnerships - have accepted the position and paid tax accordingly."

Doesn't sound like having some wider intent to me.

If you read the full Inland Revenue Briefing Notes for the 1987 legislation which interestingly were faxed to an HMRC officer on 5th November 2007 (4 days after an informal HMRC meeting about the Scheme) faxed from HMRC's Solicitors Office - Legal and Governance Room LG76 100 Parliament Street, you'll see that the text has been virtually transplanted into the BN66 Briefing Notes. Interestingly, the officer who requested this faxed content is listed as a contact for queries in the BN66 Briefing Notes which were published a couple of months after the fax was received. I know it's not relevant, but the fax machine in room LG76 had a date stamp on the fax sent of 12th Feb 1996! Even HMRC's fax machines can time travel...

Oh, I forgot to mention. Whilst the text has been transplanted, key words have been left out or changed and in doing so, gives rise to a different interpretation. I've made it a hobby (sad I know) of comparing the text from HMRC documents in 2007 / 2008 and that from 1987. You could not find anything more juxtaposed!

We know HMRC read this thread, so may I suggest you check your fax machine in said room and make sure the date is correct? Oh, and could you tell me who in HMRC underlined the word "unwary" in the Hansard photocopy where someone had also written "Distinguish IoM Partnership & Trust" right next to the underline? It's the photocopy of the 1987 Parliamentary debate on this which has been para-phrased in BN66 to give that legislation a totally new and different meaning, sorry, "clarification". Feeling a little uncomfortable?

Dynamite !!!

[marcuss]

The problem is s58 is now the law.

The courts don't care how it came to pass, and they have ruled that it doesn't conflict with any EU conventions or treaties.

HMRC is required to implement the law.

But then if the law is incorrect/unfair/wrong then that can be changed by them (the Government), right?

So more lobbying to anybody and everybody who think they have power!

[Tax_shouldnt_be_taxing]

Hansard

Nope. Sounds about right to me. As for your last post, I didn't realise that Hansard was closed to the court. Yet more fuel for my discussion with my MP.

I admit to feeling slightly better for having done something about this situation. Keep on writing everyone.

There was a case before the Tax Courts where they court actually used Hansard to gain a true understanding of what the law meant and what Parliament intended compared to the view of HMRC. As a result, HMRC lost that one.

BTW, I recall a few posts asking what Hansard is. It's the Parliamentary record of debates and the like in the House of Commons. It is if you like, Parliament's intent in writing. And that writing from 1987 has little to do with the text from 2008 when BN66 was debated.

Gauke came close to getting Hansard 1987 evidence used to defeat the retrospection but just fell short of ramming it home. Jane Kennedy interrupted him with some insane reference to music in the hallway...

[SantaClaus]

...

Oh, I forgot to mention. Whilst the text has been transplanted, key words have been left out or changed and in doing so, gives rise to a different interpretation. I've made it a hobby (sad I know) of comparing the text from HMRC documents in 2007 / 2008 and that from 1987. You could not find anything more juxtaposed!

...

So not only do HMRC have a time machine, but its a little bit faulty and words get changed in the space time continuum.

[moira under the stairs]

So not only do HMRC have a time machine, but its a little bit faulty and words get changed in the space time continuum.

Mr HMRC....'there maybe trouble ahead !!!

[sjw]

Mr HMRC....'there maybe trouble ahead !!!

before we all get excited - if we think we can persuade the tax courts to support our view I'd like to understand why that wasn't MP's first line of attack?

[Disgusted of Coventry]

So not only do HMRC have a time machine, but its a little bit faulty and words get changed in the space time continuum.

It's also placed DR in an infinite loop where he has to patiently reiterate "unfortunately s58 is the Law" every 50 pages or so, whilst everyone else wrestles with abject disbelief.

[swede]

Glad you're on our side.

We know HMRC read this thread, so may I suggest you check your fax machine in said room and make sure the date is correct? Oh, and could you tell me who in HMRC underlined the word "unwary" in the Hansard photocopy where someone had also written "Distinguish IoM Partnership & Trust" right next to the underline? It's the photocopy of the 1987 Parliamentary debate on this which has been para-phrased in BN66 to give that legislation a totally new and different meaning, sorry, "clarification". Feeling a little uncomfortable?

Can I borrow you for my tax tribunal when it comes round please?

[Tax_shouldnt_be_taxing]

before we all get excited - if we think we can persuade the tax courts to support our view I'd like to understand why that wasn't MP's first line of attack?

I think it's fair to say that MP missed the boat on BN66 at the start. Besides, my posts are not saying that I think this can convince a court in our favour and as DR keeps saying, s58 is the law. But to let rip with some facts and figures and chronology including shady meetings on 1st Nov 2007 followed by faxes about 1987 make for a jolly riveting tale and some squirming for HMRC. Even to stand up at the TC amnd say:

"OK, so s58 is the law. So, HMRC win. Look at them grinning with pleasure. But ma lud, it may pleasure the court to hear a rather telling tale. Are you sitting comfortably? HMRC arn't. Then I'll begin. Once upon a time in November 2007... and none of us lived happily ever after. The END".