[2024] UKUT 00319 (TCC)

It is not in dispute that UK law at the relevant times, at least on its face, interfered with the EU law right of freedom of establishment of both appellants. What is in issue in this appeal is how those rights are to be vindicated. Does a conforming interpretation of the legislation exist which would give effect to the EU law rights of the appellants?

If a conforming interpretation is not possible the jurisprudence of the CJEU is that:

So, where a conforming construction is not possible, the proper approach is to disapply the incompatible provision. In such circumstances, the disapplied provision remains applicable, save to the extent that it is incompatible with EU law. An example given to us was in Factortame, where the court held that the restriction in Part II of the Merchant Shipping Act did not apply to nationals of other EU Member States, although it continued to apply to persons who were not EU nationals.

In both Panayi FTT and Redevco FTT, the FTT held that an appropriate conforming interpretation exists. The Trustees and Redevco submit that the FTT was wrong, no such conforming interpretation exists, and the exit tax provisions of UK legislation should be disapplied.