TC09682 - [2025] UKFTT 01334 (TC)

Shortly before the release of this decision, the Supreme Court refused permission to appeal the Court of Appeal decision in Marlborough, rendering the application to stay this appeal behind that case futile. However, further to the request made by the parties during the hearing, and for the purposes of completeness, the reasons for refusing that application are set out below.

In determining whether this appeal should be stayed behind Marlborough, I adopt the approach taken in Revenue and Customs Commissioners v RBS Deutschland Holdings GmbH [2007] STC 814, namely, to consider: (i) whether the decision in the other appeal will be of “material assistance” and (ii) whether, it is expedient to stay the appeal.

The Appellant argues that the Supreme Court’s forthcoming decision in Marlborough could provide significant guidance relevant to this appeal and submits that the case will address issues concerning the deductibility of contributions to remuneration trusts, which is a central question in these proceedings. In particular, the Appellant contends that the Supreme Court may clarify the interpretation and application of the “wholly and exclusively” test under UK tax law, a principle that underpins HMRC’s disallowance of the claimed deductions.

The Appellant also submits that even if the Marlborough decision does not resolve all issues in this case, it could materially assist the Tribunal by shaping the legal framework for assessing deductibility and influencing how findings of fact and law should be approached. They argue that the outcome could affect pleadings, the scope of evidence required, and the legal analysis to be applied at the hearing. The Appellant also argues that the Tribunal has discretion to grant a stay where another decision may be of material assistance, and that a stay need not be limited to cases where the other decision would be determinative.

The Appellant further submits that granting a stay would promote consistency and efficiency, avoiding the risk of proceeding under an uncertain legal position only to have the Supreme Court issue guidance shortly thereafter. They argue that the interests of justice favours a short delay to ensure the Tribunal benefits from any authoritative clarification on deductibility principles.

Having carefully considered the Appellant’s submissions, I am not satisfied that the decision in Marlborough will be of material assistance in this appeal or that it is expedient to stay this appeal pending the outcome of the Supreme Court judgment.

I agree with HMRC that the issues in Marlborough are fundamentally different from those in the present appeal. Aside from the statutory differences involved in a case concerning employment income provisions in Marlborough and property income provisions in this appeal, the “wholly and exclusively” issue in Marlborough focuses on whether the Upper Tribunal was entitled to interfere with the First-Tier Tribunal’s finding that a payment made for tax avoidance purposes was made wholly and exclusively for the purposes of trade.

I accept that there are some similarities in the factual and legal issues involved in the cases. However, I do not consider this demonstrates that the other appeal will be of material assistance. The question is not whether the determination of another court might provide assistance, but whether it will provide material assistance (see Coast Telecom Limited v HMRC [2012] UKFTT 3017 (TC) at [21]).

I consider the issue of whether the Upper Tribunal was entitled to interfere with the First-Tier Tribunal’s finding is not relevant to the first-instance hearing of this appeal, where the First-Tier Tribunal is yet to make any findings of fact. Accordingly, I do not consider that it would be expedient to delay the first-instance hearing in this appeal pending the determination of that issue.