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  1. #1

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    Default LCAG - JR decision

    Le Roux Zeeman & Ors v HM Revenue and Customs [2020] EWHC 794 (Admin) (03 April 2020)

    If you are a client, we will be considering this over the weekend and commenting on this decision both stand alone and in context with other recent cases, early next week.
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    CONCLUSION

    In the context of tax avoidance, the decision to impose a charge on the cumulative balances of the loans that remained outstanding at close of business on 5 April 2019 is justified by a legitimate policy and is fair and reasonable in all the circumstances. This legislation puts beyond doubt the taxable nature of these loans. It comes nowhere near fundamentally undermining the financial position of all those who are affected by it, and there was no evidence to suggest that it does.

    I therefore agree with Cockerill J's conclusions in Cartref that this legislation is not "manifestly without reasonable foundation" but, on the contrary, it falls squarely within the margin of appreciation afforded to the State under the second paragraph of A1P1.

    For those reasons, if A1P1 did apply, there has been no unlawful deprivation of possessions and this challenge to Schedules 11 and 12 of the 2017 Act is therefore dismissed.

    So in other words, parliament can legislate that black is white, white is black.

    Very disappointing news. It is what I expected, I hoped to be wrong.
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    Quote Originally Posted by BrilloPad View Post
    CONCLUSION

    In the context of tax avoidance, the decision to impose a charge on the cumulative balances of the loans that remained outstanding at close of business on 5 April 2019 is justified by a legitimate policy and is fair and reasonable in all the circumstances. This legislation puts beyond doubt the taxable nature of these loans. It comes nowhere near fundamentally undermining the financial position of all those who are affected by it, and there was no evidence to suggest that it does.

    I therefore agree with Cockerill J's conclusions in Cartref that this legislation is not "manifestly without reasonable foundation" but, on the contrary, it falls squarely within the margin of appreciation afforded to the State under the second paragraph of A1P1.

    For those reasons, if A1P1 did apply, there has been no unlawful deprivation of possessions and this challenge to Schedules 11 and 12 of the 2017 Act is therefore dismissed.

    So in other words, parliament can legislate that black is white, white is black.

    Very disappointing news. It is what I expected, I hoped to be wrong.
    The above statement seems incredibly far from reality ( even if it seems like RVQCs argument and preparation were pants ).

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    Quote Originally Posted by dammit chloe View Post
    The above statement seems incredibly far from reality ( even if it seems like RVQCs argument and preparation were pants ).
    Agree strongly. Retrospective legislation must be made illegal. I wonder what sort of pay off the judge will get?
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    Quote Originally Posted by dammit chloe View Post
    The above statement seems incredibly far from reality...
    When they passed section 58 retro, back in 2008, I thought surely that can't be allowed. For a while, I bought into the argument that it must be contrary to human rights, natural justice or something.

    How wrong I was. The High Court, Court of Appeal, Supreme Court and European Court of Human Rights all rejected various challenges to the retro nature of section 58.

    Unfortunately, the real reality is Parliament can enact pretty much any law they like if it's in response to tax avoidance. The ECHR gives them virtual carte blanche.

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    Quote Originally Posted by DealorNoDeal View Post
    When they passed section 58 retro, back in 2008, I thought surely that can't be allowed. For a while, I bought into the argument that it must be contrary to human rights, natural justice or something.

    How wrong I was. The High Court, Court of Appeal, Supreme Court and European Court of Human Rights all rejected various challenges to the retro nature of section 58.

    Unfortunately, the real reality is Parliament can enact pretty much any law they like if it's in response to tax avoidance. The ECHR gives them virtual carte blanche.
    I was thinking more about this than the legal remit.

    "This legislation puts beyond doubt the taxable nature of these loans. It comes nowhere near fundamentally undermining the financial position of all those who are affected by it, and there was no evidence to suggest that it does."

    I don't believe it does the first sentence at all. Given how many people will be ruined I can't see how the second is anything but a lie.

    Shows how far removed what may be a remote legalese definition differs from someone who simply signed up to schemes that had been running for ages.

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    Quote Originally Posted by dammit chloe View Post
    I was thinking more about this than the legal remit.

    "This legislation puts beyond doubt the taxable nature of these loans. It comes nowhere near fundamentally undermining the financial position of all those who are affected by it, and there was no evidence to suggest that it does."

    I don't believe it does the first sentence at all. Given how many people will be ruined I can't see how the second is anything but a lie.

    Shows how far removed what may be a remote legalese definition differs from someone who simply signed up to schemes that had been running for ages.
    Go back and look at the people who are named as parties in the review - while that second sentence is probably wrong about everyone who reads this forum its probably completely accurate for the 2 people who are named and brought the review
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    Quote Originally Posted by eek View Post
    Go back and look at the people who are named as parties in the review - while that second sentence is probably wrong about everyone who reads this forum its probably completely accurate for the 2 people who are named and brought the review
    I'm not sure what you are inferring ( very highly paid? ). I have met one of the parties and they will be bankrupted.

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    Quote Originally Posted by dammit chloe View Post
    I was thinking more about this than the legal remit.

    "This legislation puts beyond doubt the taxable nature of these loans. It comes nowhere near fundamentally undermining the financial position of all those who are affected by it, and there was no evidence to suggest that it does."

    I don't believe it does the first sentence at all. Given how many people will be ruined I can't see how the second is anything but a lie.

    Shows how far removed what may be a remote legalese definition differs from someone who simply signed up to schemes that had been running for ages.
    You are thinking in exactly the same way I was 10 years ago. In the Huitson case, the Judge was told people would be bankrupted/ruined by the retrospective nature of section 58 but it didn't cut any mustard.

    In his ruling, the Judge even suggested to HMRC that going easy on people who faced ruin would be unfair to those users of the scheme who had put money on one side (just in case) and even more unfair to the overwhelming majority of taxpayers who had not entered into such schemes.

    The bottom line is, no matter how draconian legislation is, if it's anti-avoidance, it's extremely unlikely that a challenge on human rights grounds will achieve anything.

    I hope Venables pointed this out to LCAG before he took the case.

    As an aside, I doubt you would find many human rights barristers willing to take on a case as hopeless as this.
    Last edited by DealorNoDeal; 5th April 2020 at 08:34.

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    Quote Originally Posted by DealorNoDeal View Post
    I hope Venables pointed this out to LCAG before he took the case.

    As an aside, I doubt you would find many human rights barristers willing to take on a case as hopeless as this.
    Robert Venables QC, the man referenced in almost every scheme I think I've ever seen, advising people to not give him money.
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