CA-2024-001410 - [2025] EWCA Civ 1443

The Grounds of Appeal and Respondent’s Notice

The two grounds of appeal to this court may be summarised as follows:

Ground 1: The FTT and UT failed properly to apply Scotts Atlantic. There is a fine dividing line between choosing a tax-efficient arrangement and having a separate tax-saving purpose. Scotts Atlantic involved a highly artificial scheme with an “all-pervading” tax avoidance purpose, which this was not. The arrangements were intended to provide pensions and were doing so.

Ground 2: Alternatively, Scotts Atlantic was wrongly decided. It was also inconsistent with this court’s decision in Hoey & others v Revenue and Customs Comrs [2022] EWCA Civ 656, [2022] 1 WLR 4113 (“Hoey”) and it misapplied the comments of Lord Cross in Ransom v Higgs [1974] 1 WLR 1594, 50 TC 1 in respect of one of the joined appeals in that case, Kilmorie (Aldridge) Ltd v Dickinson (“Kilmorie”).

By their Respondent’s Notice, HMRC endorsed the reasons given by the UT for dismissing the appeal, but also sought its dismissal on the ground that deduction was precluded under s.1290 CTA 2009, contrary to the UT’s view. In essence, HMRC say that the purpose of s.1290 is to align the timing of a deduction with taxation of the receipt (in this case when pensions were paid) and the UT interpreted it too narrowly.

Wholly and exclusively: s.54 CTA 2009

Section 54 CTA 2009 provides: