Test Claimants In the Loss Relief Group Litigation v Inland Revenue

Test Claimants In the Loss Relief Group Litigation v Inland Revenue

The High Court was obliged to entertain the claimants' group loss relief claims based on Community law, even though the statutory tax procedure was not followed, because UK law denied the benefit and it would be impossible or excessively difficult for non-resident companies to comply with the statutory requirements. The principle of effectiveness under Community law requires national courts to provide an effective remedy and not to refuse or reduce claims solely because the statutory procedure was not used.

Parties
Appellants: The Test Claimants in the Loss Relief Group Litigation; Respondents: Commissioners of Inland Revenue
Jurisdiction
England and Wales
Judgment Date
28 May 2004
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal allowed; High Court order discharged; Revenue's application to strike out dismissed; costs to appellants; permission to appeal to House of Lords refused.
Legal Topics
Group Loss Relief, Jurisdiction of National Courts, Community Law Effectiveness, Double Taxation Treaties
Tax Law European Union Law Civil Procedure Group Loss Relief Jurisdiction of National Courts Community Law Effectiveness Double Taxation Treaties

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Parties

The Test Claimants in the Loss Relief Group Litigation

Appellants

Commissioners of Inland Revenue

Respondents

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether the High Court has jurisdiction to hear claims for group loss relief based on Community law where the statutory tax procedure was not followed
  2. 2 Whether Community law requires national courts to entertain claims for restitution or damages where national law denies the tax benefit
  3. 3 Whether the principle of effectiveness under Community law overrides national procedural requirements

Ratio Decidendi

The High Court was obliged to entertain the claimants' group loss relief claims based on Community law, even though the statutory tax procedure was not followed, because UK law denied the benefit and it would be impossible or excessively difficult for non-resident companies to comply with the statutory requirements. The principle of effectiveness under Community law requires national courts to provide an effective remedy and not to refuse or reduce claims solely because the statutory procedure was not used.

Court Disposition

Appeal allowed; High Court order discharged; Revenue's application to strike out dismissed; costs to appellants; permission to appeal to House of Lords refused.

Orders

  • Appeal allowed
  • Judge’s order discharged