UT/2023/000067 - [2024] UKUT 00106 (TCC)

Mr Edwards, appearing for QASL, submitted that there was never any physical delivery of investment gold and no prospect of it or right to it. In any event, adequate records were kept with specific information which is substantially the same as that if the record keeping and invoice obligations applied. The investment gold which was the subject of the relevant transactions was neither “delivered” nor “otherwise made available to” QASL’s customer as required by Section 6 of the Notice or “delivered” or “available to be taken away” by QASL’s customers as required by section 7.1 of the Notice. The investment gold remained in the designated vaults (i.e. within the “black box” described by Mr Tustain) and was never removed. In these circumstances, there was no necessity to impose the record keeping obligations in relation to the relevant transactions and, indeed, it was disproportionate to do so.

Mr Edwards relied particularly on the terms of the Second Waiver by which, he submitted, the Designated Employee (of QASL’s Client) waived his/her right to take delivery of the investment gold. The Second Waiver was signed by Mr David Graham, the director of QASL, as agent for the Client pursuant to Supply of Services Agreement, dated 24 February 2016, between QASL and the Designated Employee referred to at paragraphs 20 and 21 above. The FTT had erred in law by ignoring the effect of the Second Waiver.

The terms of regulation 31A(1)(b), the provision which provided the statutory authority for the Notice, applied to a supply within item 2 of Group 15 of Schedule 9 to the Act “which subsequently results in the transfer of the possession of the investment gold.” (Emphasis added). This made it clear, in Mr Edwards’s submission, that the terms of the Notice could only apply in cases where there was a transfer of possession of the investment gold. It was not possible for the terms and the meaning of the Notice to be wider than the language used by regulation 31A(1)(b) which was limited to cases where there was a transfer of physical possession.