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R (on the application of Rowe and others) v CRC; R (on the application of Vital Nut Co Ltd and others) v CRC, Court of Appeal, 12 December 2017
Fairness of partner payment notices regime
Rowe was the lead case for 81 taxpayers who had participated in film partnership schemes. The taxpayers had made claims for their share of partnership losses but HMRC disallowed these losses and issued partner payment notices.
The taxpayers applied for judicial review but the High Court dismissed this. They appealed.
The first ground of appeal was that partner payment notices did not form part of the statutory purpose in FA 2014 because the aim of the legislation was to discourage the use of tax avoidance schemes and the arrangements in point had been used before that Act.
Lady Justice Arden reiterated that the ‘object of the powers is to enable HMRC by exercising them to disincentivise other taxpayers from entering into such schemes’. She did not accept that the notice was beyond the purpose of the regime. Further the regime had been ‘very...
