Routier & Anor v Revenue And Customs [2017] EWCA Civ 1584 (17 October 2017)

Routier & Anor v Revenue And Customs [2017] EWCA Civ 1584 (17 October 2017)

Jersey is to be treated as a third country for the purposes of the freedom of movement of capital under Article 56 EC. The restriction in IHTA, s 23, which limits inheritance tax relief to UK charities, is justified under EU law on the grounds of effective fiscal supervision because, at the date of death, there was no mutual assistance agreement between the UK and Jersey to allow HMRC to verify the charitable status of the Coulter Trust. The restriction is proportionate and does not breach EU law. IHTA, s 23 cannot be interpreted in conformity with EU law to extend relief to the Coulter Trust in these circumstances.

Citation
[2017] EWCA Civ 1584
Parties
Appellants: Routier & Anr; Respondents: The Commissioners for HM Revenue and Customs; Intervener: HM Attorney General for Jersey
Jurisdiction
England and Wales
Judgment Date
17 October 2017
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal dismissed
Legal Topics
Inheritance Tax, Freedom of Movement of Capital, Charitable Gifts, EU Third Country Status, Effective Fiscal Supervision, Interpretation of Statutes
Tax Law European Union Law Charity Law Inheritance Tax Freedom of Movement of Capital Charitable Gifts EU Third Country Status Effective Fiscal Supervision +1 more

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Parties

Routier & Anr

Appellants

The Commissioners for HM Revenue and Customs

Respondents

HM Attorney General for Jersey

Intervener

Procedural Posture

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

Legal Issues

  1. 1 Whether Jersey is a third country or part of the UK for the purposes of the EU law principle of freedom of movement of capital under Article 56 EC (now Article 63 TFEU)
  2. 2 Whether the restriction in section 23 of the Inheritance Tax Act 1984 (IHTA) limiting relief to UK charities is justified under EU law on grounds of effective fiscal supervision (EFS)
  3. 3 Whether IHTA, s 23 can be interpreted in conformity with EU law to extend relief to non-UK charities

Ratio Decidendi

Jersey is to be treated as a third country for the purposes of the freedom of movement of capital under Article 56 EC. The restriction in IHTA, s 23, which limits inheritance tax relief to UK charities, is justified under EU law on the grounds of effective fiscal supervision because, at the date of death, there was no mutual assistance agreement between the UK and Jersey to allow HMRC to verify the charitable status of the Coulter Trust. The restriction is proportionate and does not breach EU law. IHTA, s 23 cannot be interpreted in conformity with EU law to extend relief to the Coulter Trust in these circumstances.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed; the determination of HMRC stands; inheritance tax and interest are payable as assessed.