Upper Tribunal Tax and Chancery Chamber

[2024] UKUT 00319 (TCC)

Fecha: 23-May-2024

Procedural history

Procedural history

The matters giving rise to the Trustees’ appeal took place some 20 years ago. The procedural history is lengthy:

(1)

29 September 2010: HMRC closure notice issued.

(2)

18 October 2010: the Trustees appealed to HMRC against the closure notice.

(3)

14 November 2012: the Trustees notified the appeal to the FTT.

(4)

30 November 2015: the FTT made a Request for a Preliminary Ruling to the CJEU. The Request asked whether a trust was capable of benefitting from the four freedoms, and if it was, whether the charge to tax imposed by s80 TCGA was a proportionate and necessary interference with the four freedoms (Trustees of the P Panayi Accumulation and Maintenance Settlements v RCC (Case C-646/15).

(5)

21 December 2016: Advocate General Kokott gave her Opinion.

(6)

14 September 2017: the CJEU gave judgment in which it held that a trust was capable of benefitting from the four freedoms and the imposition of an immediate charge to tax (at the exit date) was a disproportionate interference with the freedom of establishment (“Panayi CJEU”).

(7)

24 October 2019: Following a hearing, the FTT released the decision now under appeal (“Panayi FTT”).

(8)

17 February 2020: Permission to appeal to the Upper Tribunal was granted by the FTT.

(9)

31 December 2020: IP Completion Date (“Brexit”).

(10)

21 June 2021: the hearing of the Trustees’ appeal was stayed pending the outcome of the reference to the CJEU in Gallaher Limited v HMRC (Case C-707/20).

(11)

16 February 2023: Judgment was handed down by the CJEU in Gallaher - but the CJEU’s decision was decided on a different basis to the issues in these appeals, and so was not dispositive of the issues that arise in these appeals.

In the case of Redevco, the matters giving rise to this appeal took place over 16 years ago. The procedural history of the Redevco appeal is as follows:

(1)

31 December 2020: Brexit.

(2)

2 August 2021: HMRC closure notice issued (Footnote: ²).

(3)

31 August 2021: Redevco appealed to HMRC against the closure notice and notified the appeal to the FTT.

(4)

21 July 2023: Following a hearing, the FTT released the decision now under appeal (“Redevco FTT”).

(5)

18 September 2023: Permission to appeal was granted by the FTT. In granting permission, Judge Brooks recommended that given the similarity of the issues and legislation concerned, consideration be given by this Tribunal to hearing Redevco’s appeal at the same time as the Trustees’ appeal.

On 17 January 2024 Judge Aleksander directed that the Trustees’ and Redevco’s appeals be heard together by the same judicial panel in order to ensure that all relevant issues are ventilated at one hearing and that all parties have the opportunity to address them in their submissions.

10.

On 19 July 2024, after the hearing of this appeal, the Supreme Court handed down its judgment in Lipton and anr v BA Cityflyer Ltd [2024] UKSC 24. In view of the statements made in the judgments relating to the tensions between s16 Interpretation Act 1978 and the provisions of the European Union (Withdrawal) Act 2018, we asked the parties whether they wished to make representations on any impact the Supreme Court’s decision might have on this appeal. All of the parties confirmed that they considered that the decision of the Supreme Court had no relevance to the issues before the Tribunal. We agree. We note in particular that sections 2, 3 and 4, Retained EU Law (Revocation and Reform) Act 2023 (“REULA”), do not apply “in relation to anything occurring before the end of 2023” (s22(4) REULA). As the material events that are the subject of this appeal all took place well before the end of 2023, we find that none of the provisions of REULA providing for the “sunset of the supremacy of EU law”, the “sunset of general principles of EU law”, and the “sunset of retained EU rights, powers, liabilities etc” are engaged.

11.

For completeness, we mention that Judge Aleksander, in his capacity as a Judge of the First-tier Tribunal, had some involvement in the case management of Redevco’s appeal before the FTT. He did not consider that that his earlier involvement precluded him from sitting on this appeal as he was concerned only with case management matters and none of the substantive issues. The parties were asked for their views and none of them objected to him sitting on this appeal.