CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

Fecha: 02-Oct-2025

The difficulty for Mr Shah, even allowing for the problems created by the way questions were put, was how to explain a reported payment of an amount net of ‘tax’ if, as he appeared to agree, the same

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The difficulty for Mr Shah, even allowing for the problems created by the way questions were put, was how to explain a reported payment of an amount net of ‘tax’ if, as he appeared to agree, the same report stated that there had been an entitlement to the gross amount. Mr Shah’s best effort was the circular logic in the first answer in the following exchange in cross-examination:

“Q. What do you say the reference to “withholding tax deducted” actually refers to, then, Mr Shah?
A. The only way I can explain that is that’s 27% of the gross dividend which is the difference between the net and the gross, and that amount represents the amount that the pension plan or the applicant is entitled to receive from SKAT.
Q. So that is simply a reference to a calculation which has been made to produce the net dividend amount figure?
A. Yes, that’s my understanding.
[In fact, Mr Shah’s first answer said rather more than that. It said that the 27% was deducted, and labelled (in this instance) “withholding tax deducted” because the client was entitled to be paid that proportion of the gross entitlement by SKAT.]
Q. Do you accept, Mr Shah, that this conveys to the reader and was intended to convey to the reader that there has in fact been withholding tax deducted?
A. I would say that it depends on the reader, it depends on who the reader is.
Q. Would you accept that a tax authority, whose job it was to give ‘refunds’ in respect of withheld tax, would have understood and intended and been intended to understand this to be a reference to there in fact having been withholding tax deducted?
A. I’m not that familiar with the processes but my understanding is that this would convey to SKAT that this is the amount that the applicant is entitled to reclaim.
[This confirmed that Mr Shah did intend his first answer in the way I understood it – see above.]
Q. Mr Shah, how would a reader of this know or understand that no tax has actually ever been deducted?
A. You mean deducted by the issuing company?
Q. Actually deducted, as opposed to as part of some calculation simply intended to achieve another figure?
A. Well, if the question is how would I explain that, I would explain by saying that this arises due to the loophole.
Q. The question is how would a reader of this know or understand that no tax has actually ever been deducted?
A. I don’t know the answer to that.”