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The Franked Investment Income Group Litigation -v- Inland Re

Income, Corporation, Capital Gains, Inheritance Taxes, VAT and so on.

The Franked Investment Income Group Litigation -v- Inland Re

Postby dls » Tue Jan 08, 2013 2:26 pm

Test Claimants In The Franked Investment Income Group Litigation -v- Inland Revenue - SC - 23-May-2012 - Lord Hope, Deputy President, Lord Walker, Lord Brown, Lord Clarke, Lord Dyson, Lord Sumption, Lord Reed (Bailii, [2012] UKSC 19, [2012] WLR(D) 161, [2012] STC 1362, [2012] 2 WLR 1149, [2012] 3 All ER 909, [2012] BTC 312, [2012] 2 AC 337, [2012] Bus LR 1033, [2012] STI 1707) - European - Corporation Tax - Limitation - Taxes Management - Damages
The European court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European subsidiaries, breach of EU Treaty guarantees of freedom of establishment and of movement of capital. The court was now asked as to the calculation of damages. Two remedies might be available: a demand for repayment of tax unlawfully demanded (under Woolwich), or for tax paid under a mistake of law (under DMG). The first would be time barred. The limit had been relaxed under the 1980 Act for the second. The Court of Appeal had found the Woolwich type remedy the appropriate one. The taxpayer appealed.
Held: As to whether Parliament had the right to amend the law in a way which disallowed access to both types of claims, the principle issue, a reference was made back to the European Court. The claimants' appeal were dismissed on the issues of the application of section 32(1)(c) of the 1980 Act applied to their claims, and as to the significance of the difference between pax paid under demand or on filing a tax return.
The appeal succeeded in arguing that section 33 can be given an interpretation which conforms with EU law by not construing it as impliedly setting itself up as an exclusive provision. The common law claim in unjust enrichment remains available to the appellants. The appeal on this issue was allowed.
Lord Hope said: " I would hold that Parliament could not lawfully curtail without notice the extended limitation period under section 32(1)(c) of the Limitation Act 1980 for the mistake cause of action by section 320 FA 2004."
Statutes:
Limitation Act 1980 s. 32(1)(c)
Finance Act 2007 s. 107

Cases Cited:
Test Claimants In the FII Group Litigation -v- HM Revenue & Customs ChD 27-11-2008 (Bailii, [2008] EWHC 2893 (Ch), [2009] BTC 443, [2008] STI 2726, [2009] STC 254, [2009] Eu LR 413) - At First Instance
Franked Investment Group Litigation Test Claimants -v- Inland Revenue and Another CA 23-2-2010 (Bailii, [2010] EWCA Civ 103) - Appeal from
Amministrazione Delle Finanze Dello Stato -v- Spa San Giorgio ECJ 9-11-1983 (R-199/82, Bailii, [1983] EUECJ R-199/82, [1983] ECR 3595)
ACF Chemiefarma -v- Commission ECJ 15-7-1970 (C-41/69, Bailii, [1970] EUECJ C-41/69)
Woolwich Equitable Building Society -v- Inland Revenue Commissioners (2) HL 1993 ([1993] AC 70, [1992] 3 All ER 737, (1992) 3 WLR 366)
Test Claimants In The FII Group Litigation -v- CIR ECJ 12-12-2006 (C-446/04, Bailii, [2006] EUECJ C-446/04, [2007] STC 326, [2006] ECR I-11753) - At ECJ
Brooksbank -v- Smith 24-2-1836 (, Commonlii, [1836] EngR 447, (1836) Donn Eq 11, (1836) 47 ER 193 (B))
Baker -v- Courage & Co 1910 ([1910] 1 KB 56)
Phillips-Higgins -v- Harper QBD 1954 ([1954] 1 QB 411, [1954] 2 All ER 51)
Marleasing SA -v- La Comercial Internacional de Alimentación SA ECJ 13-11-1990 ((1992) 1 CMLR 305, C-106/89, [1990] ECR I-4135, Bailii, [1990] EUECJ C-106/89, [1990] 1 ECR 3313)
Brasserie du Pecheur -v- Bundesrepublik Deutschland; Regina -v- Secretary of State for Transport, ex parte Factortame and others (4) ECJ 5-3-1996 (Times 07-Mar-96, [1996] 2 WLR 506, [1996] IRLR 267, Europa, (1996) 1 CMLR 889, C-46/93, [1996] QB 404, C-48/93, [1996] ECR 1-1029, Bailii, [1996] EUECJ C-46/93, [1996] CEC 295, [1996] All ER (EC) 301, [1996] 1 CMLR 889)
Morgan Guaranty -v- Lothian Regional Council SCS 1-12-1994 (1995 SLT 299, 1995 SCLR 225, Bailii, [1994] ScotCS CSIH_3, 1995 SC 151)
HM Treasury -v- Ahmed and Others SC 27-1-2010 (Bailii, [2010] UKSC 2, Times, SC, SC Summ, UKSC 2009/0016, [2010] UKHRR 204, [2010] 2 WLR 378, WLRD, [2010] WLR (D) 12, [2010] 2 AC 534, Bailii Summary, [2010] 4 All ER 829, [2010] Lloyd's Rep FC 217)
Deutsche Morgan Grenfell Group Plc -v- Inland Revenue and Another HL 25-10-2006 (Bailii, [2006] UKHL 49, Times 26-Oct-06, [2007] 1 AC 558, [2006] BTC 781, [2007] Eu LR 226, [2007] 1 CMLR 14, [2006] STI 2386, [2006] 3 WLR 781, [2007] 1 All ER 449, HL)
Boake Allen Ltd and others -v- HM Revenue & Customs CA 31-1-2006 (Bailii, [2006] EWCA Civ 25, Times 10-Feb-06, [2006] STC 606, [2006] BTC 266, 8 ITL Rep 819, [2006] STI 32, [2006] Eu LR 755)
Kleinwort Benson Ltd -v- Lincoln City Council etc HL 29-7-1998 (Gazette 18-Nov-98, Gazette 10-Feb-99, Times 30-Oct-98, House of Lords, Bailii, [1998] UKHL 38, [1999] 2 AC 349, [1998] 4 All ER 513, [1998] 3 WLR 1095, [1998] Lloyds Rep Bank 387)
NEC Semi-Conductors Limited and Other Test Claimants -v- The Commissioners of Inland Revenue ChD 24-11-2003 (Bailii, [2003] EWHC 2813 (Ch), Gazette 29-Jan-04, [2004] STC 594)
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