Aozora and legitimate expectation: a guide to nowhere?

In R (oao Aozora GMAC Investment Ltd) the Court of Appeal dismissed the taxpayer’s claim that a statement in HMRC’s International Manual created a legitimate expectation because the taxpayer had not relied on it substantively and even if it had done there was insufficient ‘unfairness’ in frustrating the taxpayer’s expectation. The court’s decision appears to set a high bar for establishing an unlawful breach of a taxpayer’s legitimate expectation. On the question of whether or not it was ‘fair’ for HMRC to resile from its guidance the court said that the unfairness has to reach a very high level: it has to be ‘conspicuously unfair’ and akin to an ‘abuse of power’. The court also considered that the need to evidence detrimental reliance was essential holding also that the burden does not shift to HMRC to demonstrate some public interest in it being able...