In H Murphy and another v HMRC [2023] EWCA Civ 497 (15 May 2023) the Court of Appeal (CA) found in favour of the taxpayer ruling that the ‘ordinarily sophisticated taxpayer’ had a legitimate expectation that HMRC concession ESC B18 (1999) applied without a six-year time limit in respect of credit for UK income tax paid on trust income.
In Murphy a non-resident trust made distributions of over £9m to UK-resident beneficiaries. The trustees sought HMRC’s agreement that the beneficiaries would be granted credit under extra statutory concession (ESC) B18 (1999) for UK income tax which had been paid on trust income regardless of whether the income of the trust had arisen within the last six years or a longer period. HMRC permitted the claim for six years (although HMRC apparently gave relief for one earlier year in error) but refused the remainder of the claim...
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