Dominant purpose of documents subject to legal professional privilege

HMRC issued to the taxpayer an information notice under FA 2008 Sch 36 requesting various documents.

The taxpayer’s adviser appealed against the notice saying it considered that 12 of the documents required were legally privileged. These papers related to communications between the taxpayer and their solicitors. HMRC did not accept that the documents were privileged saying that implementation advice would not be privileged simply by reason of being provided by a lawyer.

The taxpayer took the matter the First-tier Tribunal.

The tribunal noted that the dispute concerned whether it was necessary to consider the dominant purpose of the communication to determine whether a document is privileged. HMRC argue that it was while the taxpayer disagreed saying also that the nature of the communications was entirely bilateral – between the taxpayer and the lawyer. The judge concluded that if the dominant purpose of a communication was to...