No second bite of the cherry

The taxpayers had taken part in a marketed tax avoidance scheme set up in the Isle of Man. It used the UK/Isle of Man double tax agreement to channel the profits of a Manx partnership to the UK resident taxpayers through interest in possession trusts established by the taxpayers. They claimed relief from UK income tax on the payments from the trusts.

HMRC said ITTOIA 2005 s 858 (introduced with retrospective effect by FA 2008 s 58) applied and rendered the income liable to tax.

The taxpayers applied for judicial review. The Court of Appeal ruled that the payments were not movement of capital within article 56 and dismissed the application (R (on the application of Shiner and another) v HMRC [2011] STC 1878).

The taxpayers appealed to the First-tier Tribunal (TC3505). The judge struck out the part of the appeal in which the taxpayers argued that FA...