This week’s opinion

The tax system can produce unexpected results. Sometimes these are in the taxpayer’s favour but it is equally likely to result in a liability out of all proportion to the underlying transaction. The classic example of this was Lobler v CRC [2015] STC 1893 in which the taxpayer faced a bill of more than £350 000 on part withdrawals from life policies even though the policy made a loss. Fortunately for Mr Lobler the Upper Tribunal found a way to solve his problem but the underlying issue remained. HMRC was criticised by some for taking the case but it had little option. The same legislation had been used in CRC v Mayes [2011] STC 1269 to create an artificial tax loss which was upheld by the courts on the ground that even though the result could never have been intended it was clear that the...