Fowler: a deep dive into tax treaties

The case of HMRC v M F Fowler [2017] UKUT 219 (TCC) is about a South African resident diver, Mr Fowler, who undertook diving engagements in the UK Continental Shelf waters. While the facts are narrow, the decision sets out some important principles about the approach to interpretation of tax treaties, which are likely to be of wider application. The key question was whether, if an employment is deemed to be a trade, this would be sufficient to regard the income as business profits for the purposes of the treaty. The Upper Tribunal overturned the FTT decision and held that the income would be regarded as employment income for treaty purposes.