Inland Revenue & Anor v Test Claimants In the Franked Investment Income Group Litigation

Inland Revenue & Anor v Test Claimants In the Franked Investment Income Group Litigation

HMRC is estopped per rem judicatam from arguing that the ACT charge under the FID regime is protected by the standstill provision, as the issue was conclusively determined in previous litigation. Alternatively, raising the argument now would be an abuse of process. The FID regime as a whole was found to be a new restriction not protected by Article 57(1) EC/Article 64(1) TFEU.

Parties
Appellant/defendant: The Commissioners of Inland Revenue; Appellant/defendant: Commissioners for Her Majesty’s Revenue and Customs; Respondent/claimant: The Test Claimants in the Franked Investment Income Group Litigation
Jurisdiction
England and Wales
Judgment Date
02 September 2014
Procedural Posture
Civil Appeal / Appeal From High Court to Court of Appeal, Application for Permission to Amend Defence and Substantive Appeal
Outcome
appeal dismissed
Legal Topics
Advance Corporation Tax, Franked Investment Income, Standstill Provision, Issue Estoppel, Abuse of Process, Free Movement of Capital, Article 63 TFEU, Article 64(1) TFEU, Article 56 EC, Article 57(1) EC
Tax Law European Union Law Civil Procedure Advance Corporation Tax Franked Investment Income Standstill Provision Issue Estoppel Abuse of Process +5 more

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Parties

The Commissioners of Inland Revenue

Appellant/defendant

Commissioners for Her Majesty’s Revenue and Customs

Appellant/defendant

The Test Claimants in the Franked Investment Income Group Litigation

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From High Court to Court of Appeal, Application for Permission to Amend Defence and Substantive Appeal

Legal Issues

  1. 1 Whether HMRC is entitled to re-amend its defence to rely on the standstill provision in Article 64(1) TFEU to deny claims for the time value of ACT on third country FIDs
  2. 2 Whether the issue was conclusively determined in previous litigation and thus subject to issue estoppel
  3. 3 Whether raising the argument now would be an abuse of process

Ratio Decidendi

HMRC is estopped per rem judicatam from arguing that the ACT charge under the FID regime is protected by the standstill provision, as the issue was conclusively determined in previous litigation. Alternatively, raising the argument now would be an abuse of process. The FID regime as a whole was found to be a new restriction not protected by Article 57(1) EC/Article 64(1) TFEU.

Court Disposition

appeal dismissed

Orders

  • HMRC's appeal is dismissed
  • Permission to amend defence refused