Paul Henley v The Commissioners for HMRC
[2023] UKFTT 720 (TC)
Paul Hunt & Ors v The Commissioners for HMRC
22 January 2024
[2024] UKFTT 78 (TC)
First-tier Tribunal
HMRC wanted to delay these tax appeals until a similar case is decided first, to avoid conflicting court rulings. The judge agreed, saying the other case's decision will be very helpful in solving these appeals. The delay will help everyone, and it is fair.
Key Facts
- •HMRC applied for a stay of appeals concerning the application of anti-avoidance legislation (Chapter 1, Part 13 Income Tax Act 2007) to a 2015 capital reduction of Golf Holdings Limited.
- •The appeals involve the definition of "relevant consideration" under section 685 ITA 2007.
- •Two related appeals (the "earlier appeal") were scheduled to be heard before the current appeals.
- •The earlier appeal also concerns the interpretation of "relevant consideration" under section 685 ITA 2007 and the application of section 685(6) ITA 2007.
- •Appellants opposed the stay, arguing HMRC was cherry-picking cases and that the issues in the appeals differed.
Legal Principles
A tribunal may stay proceedings if a decision in another case would materially assist in resolving the issues and it is expedient to do so.
HMRC v RBS Deutschland Holdings GmbH [2007] STC 814 at [22], as adopted in Newport City Council ([2023] UKFTT 00914)
The tribunal must consider the overriding objective of dealing with the case fairly and justly, including proportionality, avoiding delay, and considering the resources of the parties.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, Rule 2
Interpretation of "relevant consideration" under section 685(4) ITA 2007 and application of the safe harbour in section 685(6) ITA 2007.
Income Tax Act 2007, sections 685(4) and 685(6)
Outcomes
HMRC's application for a stay of proceedings was allowed.
The Tribunal Judge found that the decision in the earlier appeal on the meaning of "relevant consideration" would provide material assistance in resolving the current appeals, and a stay would avoid potentially conflicting decisions. The judge rejected the appellants' arguments that HMRC were cherry-picking cases or attempting to use the lead case mechanism.