Retrospective issue

12 February 2018

Issue: 4635 / Categories: Tax cases

I Shiner; D Sheinman v CRC, Court of Appeal, 23 January 2018

No reason to re-litigate after failure of judicial review

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 they had established for £10 each. They claimed relief from UK income tax on the payments from the trusts. HMRC said ITTOIA 2005 s 858 (introduced by FA 2008 s 58) applied retrospectively making the income arising in the partnerships chargeable on the taxpayers.

The taxpayers applied for judicial review saying the retrospective effect of the legislation was contrary to Art 56 of the EC Treaty. The Court of Appeal dismissed the application (R (on the application of Shiner and another) v CRC [2011] STC 1878).

The taxpayers then appealed to the First-tier Tribunal (TC3505)....

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