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Purposive approach to the law must work both ways
The days of a literal interpretation of the tax law have long gone. A succession of tax avoidance schemes that work on a strict ‘black letter’ approach have been struck down on a purposive interpretation. But what happens when the boot is on the other foot and the literal interpretation results in a tax charge that is manifestly unjust?
Here the courts have shown much less inclination to look beyond the strict wording of the legislation. Even in the notorious Lobler case on life assurance policy surrenders the Upper Tribunal accepted the result produced by the legislation and the taxpayer was rescued only by being allowed to rectify his mistake.
This is why the Upper Tribunal’s decision in Reeves v CRC is important. In essence a combination of deeming...
