Panayi Trusts and Redevco Ltd

In 2017 I wrote about the Panayi case after the First-tier Tribunal (FTT) had referred preliminary questions to the Court of Justice of the European Union (CJEU) (see ‘This way out’ Taxation 8 November 2017). At the time TCGA 1992 s 80 provided only for the immediate payment of the tax charged.

The CJEU held that the trust benefited from freedom of establishment and that the exit charge legislation in s 80 went beyond what was necessary to achieve the objective of preserving the UK’s taxing powers and constituted an unjustified restriction on the trusts’ freedom of establishment. The CJEU held that payment of interest in respect of exit taxes is a matter for the member states concerned.

In 2019 the case reverted to the FTT (TC7406) and its decision was that a conforming interpretation of UK law was possible. That conforming interpretation...