Compatibility of exit tax legislation with EU law

Mr Panayi was born in Cyprus but moved to the UK as a child in the late 1940s. In 1992 Mr Panayi established four accumulation and maintenance trusts for the benefit of his children and other members of his family. In 2004 he and his wife returned to Cyprus. They resigned as trustees of the settlements and appointed new trustees all of whom were resident in Cyprus. The UK corporate trustee remained.

The issue was whether the exit charge on trustees which applied to the value of the trust fund when three of the trustees ceased to be UK-resident was compatible with EU law.

In September 2017 the Court of Justice of the EU had ruled that the imposition of an immediate charge to tax at the exit date interfered with the freedom of establishment. However the First-tier Tribunal decided that a conforming interpretation could be adopted....