How to interpret tax legislation – a guide for the perplexed

Ultimately tax law is about words. More specifically the words in the statute book as supplemented or interpreted by the words of judges. But words are flighty creatures that are hard to pin down. They almost always have a semantic penumbra that is to say they have a range of possible meanings. Often a taxpayer will need one such possible meaning to win his case whereas HMRC will be arguing for another. How do you decide which of the possible meanings is right?

This article hopes to help tax advisers answer that question. It does so by setting out an intellectual framework with which to do so while giving plenty of examples.

The answer

If the reader is short of time they might benefit from the following one sentence answer: ‘The ultimate question is whether the relevant statutory provisions construed purposively ...