Three observations can be made from the Upper Tribunal’s judgment in JTIAC in which the UT rejected the taxpayer’s argument that the existence of a genuine commercial purpose precluded the operation of the unallowable purpose rule. First while it is clearly right that the FTT must view evidence critically it is questionable how far the FTT should go – and whether in the instant case the FTT’s construction of JTIAC’s purpose was too ‘aggressive’. Second if the UT’s decision ultimately stands HMRC are likely to have widened the scope of the unallowable purpose rule by inferring that a ‘group purpose’ constitutes a ‘main purpose’. Third even in light of HMRC’s recently revised guidance it remains difficult to determine where HMRC draws the line between what is acceptable and what is not – and more generally HMRC appears to be...
If you are not a subscriber, subscribe now to read this content.
Three observations can be made from the Upper Tribunal’s judgment in JTIAC in which the UT rejected the taxpayer’s argument that the existence of a genuine commercial purpose precluded the operation of the unallowable purpose rule. First while it is clearly right that the FTT must view evidence critically it is questionable how far the FTT should go – and whether in the instant case the FTT’s construction of JTIAC’s purpose was too ‘aggressive’. Second if the UT’s decision ultimately stands HMRC are likely to have widened the scope of the unallowable purpose rule by inferring that a ‘group purpose’ constitutes a ‘main purpose’. Third even in light of HMRC’s recently revised guidance it remains difficult to determine where HMRC draws the line between what is acceptable and what is not – and more generally HMRC appears to be...
If you are not a subscriber, subscribe now to read this content.
.tmb-editorspic.jpg?sfvrsn=df04ab27_1)
