TC09638 - [2025] UKFTT 01112 (TC)

I decline to make any order for disclosure in this category. There are several reasons for this.

Firstly, I do not see the obvious relevance of what is sought. This dispute concerns these taxpayers and HMRC. The issues (which govern the scope of disclosure) and the disclosure have to be appropriately focussed. The ultimate issue in these appeals is whether the gains are taxable or not. The Tribunal's jurisdiction is to determine these appeals, as between HMRC and these taxpayers. The above directions deal with the position in correspondence between HMRC and the appellants (etc). The appeals are not a roving inquiry into HMRC's own internal musings as to these schemes, or whether the revenue authorities in HMRC, NZ and/or Mauritius might or might not have thought that the schemes worked.

It is not clear to me whether these documents will shed any light on the primary facts which the Tribunal will have to decide. The Applicants' position is that these documents may (not "will") be "of significant relevance by giving important and useful insight into HMRC's views about whether a claim has been made". But, in my view, the Applicants' ultimate position that, if HMRC did request information from other tax authorities, this would suggest "that HMRC believed that the relevant DTCs were in issue" is just speculative and an insufficient basis for ordering disclosure.

At very best, it seems to me that these documents are unlikely to be probative of primary facts, meaning that the relevance of any of these documents is low and/or that they are 'train of inquiry' documents: see the discussion of the UT in McCabe v HMRC [2020] UKUT 266 (TCC) at Paras [35]-[38]

Moreover, and even if that were not the case, it seems to me that there are legitimate concerns regarding the confidentiality of state-to-state communications, especially in relation to mutual consultation as to the working of a DTC. It seems to me that the importance of preservation of confidentiality of such discussions finds some support in the provisions of the current OECD Model Tax Convention, albeit I note the caveat (drawn to my attention by the Applicants) that disclosure of such discussions may be given, or ordered.

I note that confidentiality is not a bar to disclosure. It is simply something to which some weight should appropriately be given; as it was by the FtT in McCabe [2019] UKFTT 317 (TC) (Judge Jonathan Richards, as he then was) at Paras [42]-[55]; and in that same case by the UT (Fancourt J, and UTJ Thomas Scott) at Paras [60] and following.

Ultimately, taking all the above into account, it seems to me that "the just balance" comes down against disclosure in relation to this category.