My practice is about 50% advisory work and 50% litigation. I have been advising a variety of clients on questions relating to carried interest taxation, and the mixed members LLP anti-avoidance rules. I have also been asked to look at several domicile enquiries raised recently by HMRC, and tax treaty relief issues. I cannot help noting the coincidence between these instructions and public debates around tax policy. My current litigation has been focused on trust taxation, and the sale of occupational income provisions.
What do you know now that you wish you’d known at the start of your career?
I learned pretty quickly at the start of my career not to rely on HMRC’s published guidance. I am currently involved in a number of judicial review challenges in cases where HMRC has itself sought to depart from it or from other assurances they have given to taxpayers. So I always emphasise that we need to start with the law; but clients should never be shy to look at their wider legal rights, whether those concern limitation periods, the burden of proof in cases relating to carelessness, or the possibility of enforcing public law rights.
Has a recent tax case caught your eye?
The domicile case of Coller v HMRC [2023] UKFTT 212 (TC) intrigues me. The FTT faithfully recited the settled law relating to the acquisition of a domicile of choice: residence in a jurisdiction and the intention to remain there indefinitely. But the decision flags the complexities around applying that law in the context of modern, internationally mobile high net worth families. It must now be accepted that proving intention will require more than mere assertion by a living taxpayer, although the respective weight to be placed on the many factors which might be said to show lasting connections to one country or another has become rather muddled. I admired the realistic approach to the overlapping question of a dual-resident taxpayer’s centre of vital interests which emerged from another FTT in the treaty residence case of Oppenheimer v HMRC [2022] UKFTT 112 (TC). I expect that, in due course, the higher courts will provide some helpful guidance on domicile. I also think that, whatever happens to the tax treatment of foreign domiciliaries in the coming years, there will have to be a degree of grandfathering or protection for people who are merely deemed to be domiciled within the UK and so these questions will not go away. If there is no retained protection, I predict a massive economic exodus to any one of the many international jurisdictions that tax regimes which welcome temporary residents.
What should we look out for later this year?
I represented the taxpayer hedge fund in BlueCrest Capital Management (UK) LLP v HMRC [2022] UKFTT 204 (TC) led by Amanda Hardy KC before the FTT. We have the appeal being heard this week, and the judgment of the Upper Tribunal should emerge later in the year. The case concerns the operation of the LLP salaried members rules on an investment management business, which contain three statutory conditions. The FTT held that most of BlueCrest’s portfolio managers failed statutory Condition B because they had significant influence over the LLP’s affairs; so they were correctly treated as self-employed partners, contrary to HMRC’s attempts to charge PAYE and employers’ NICs.
Finally, you might not know this about me but...
Before I was a tax barrister, I used to write about literature for a living. When I interviewed the late publisher Lord Weidenfeld, he told me he was a man in a hurry: ‘There is a German phrase which roughly translates as “the panic before the closing of the doors”, he said. The world is full of opportunities and a busy life is a happy one.
My practice is about 50% advisory work and 50% litigation. I have been advising a variety of clients on questions relating to carried interest taxation, and the mixed members LLP anti-avoidance rules. I have also been asked to look at several domicile enquiries raised recently by HMRC, and tax treaty relief issues. I cannot help noting the coincidence between these instructions and public debates around tax policy. My current litigation has been focused on trust taxation, and the sale of occupational income provisions.
What do you know now that you wish you’d known at the start of your career?
I learned pretty quickly at the start of my career not to rely on HMRC’s published guidance. I am currently involved in a number of judicial review challenges in cases where HMRC has itself sought to depart from it or from other assurances they have given to taxpayers. So I always emphasise that we need to start with the law; but clients should never be shy to look at their wider legal rights, whether those concern limitation periods, the burden of proof in cases relating to carelessness, or the possibility of enforcing public law rights.
Has a recent tax case caught your eye?
The domicile case of Coller v HMRC [2023] UKFTT 212 (TC) intrigues me. The FTT faithfully recited the settled law relating to the acquisition of a domicile of choice: residence in a jurisdiction and the intention to remain there indefinitely. But the decision flags the complexities around applying that law in the context of modern, internationally mobile high net worth families. It must now be accepted that proving intention will require more than mere assertion by a living taxpayer, although the respective weight to be placed on the many factors which might be said to show lasting connections to one country or another has become rather muddled. I admired the realistic approach to the overlapping question of a dual-resident taxpayer’s centre of vital interests which emerged from another FTT in the treaty residence case of Oppenheimer v HMRC [2022] UKFTT 112 (TC). I expect that, in due course, the higher courts will provide some helpful guidance on domicile. I also think that, whatever happens to the tax treatment of foreign domiciliaries in the coming years, there will have to be a degree of grandfathering or protection for people who are merely deemed to be domiciled within the UK and so these questions will not go away. If there is no retained protection, I predict a massive economic exodus to any one of the many international jurisdictions that tax regimes which welcome temporary residents.
What should we look out for later this year?
I represented the taxpayer hedge fund in BlueCrest Capital Management (UK) LLP v HMRC [2022] UKFTT 204 (TC) led by Amanda Hardy KC before the FTT. We have the appeal being heard this week, and the judgment of the Upper Tribunal should emerge later in the year. The case concerns the operation of the LLP salaried members rules on an investment management business, which contain three statutory conditions. The FTT held that most of BlueCrest’s portfolio managers failed statutory Condition B because they had significant influence over the LLP’s affairs; so they were correctly treated as self-employed partners, contrary to HMRC’s attempts to charge PAYE and employers’ NICs.
Finally, you might not know this about me but...
Before I was a tax barrister, I used to write about literature for a living. When I interviewed the late publisher Lord Weidenfeld, he told me he was a man in a hurry: ‘There is a German phrase which roughly translates as “the panic before the closing of the doors”, he said. The world is full of opportunities and a busy life is a happy one.
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