Thorpe v HM Revenue & Customs [2009] EWHC 611 (Ch) (26 March 2009)

Thorpe v HM Revenue & Customs [2009] EWHC 611 (Ch) (26 March 2009)

The appellant was not solely entitled to the beneficial interest in the pension fund due to the possibility of other beneficiaries, so Saunders v Vautier did not apply. The payments were unauthorised and the principle in Re Hastings-Bass did not apply as the payments were not trustee decisions. However, if the appellant returns the funds to the scheme trustees, he is not liable to tax under s 596A ICTA. The charges under ss 591C and 596A are not double taxation as they are levied on different bases.

Citation
[2009] EWHC 611 (Ch)
Parties
Appellant: Harry Thorpe; Respondents: Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
26 March 2009
Procedural Posture
Tax Appeal / Appeal From Special Commissioner to High Court
Outcome
Appeal under s 591C ICTA dismissed; appeal under s 596A ICTA allowed subject to return of funds; assessments under s 596A discharged accordingly.
Legal Topics
Pension Scheme Approval, Unauthorised Pension Payments, Double Taxation, Constructive Trusts, Application of Saunders V Vautier, Application of Re Hastings Bass, Human Rights (a1 P1)
Tax Law Trusts Law Pensions Law Pension Scheme Approval Unauthorised Pension Payments Double Taxation Constructive Trusts Application of Saunders V Vautier +2 more

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Parties

Harry Thorpe

Appellant

Commissioners for Her Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Appeal From Special Commissioner to High Court

Legal Issues

  1. 1 Whether the rule in Saunders v Vautier entitled the appellant to withdraw the pension fund without adverse tax consequences
  2. 2 Whether the principle in Re Hastings-Bass allowed reconstitution of the fund to avoid tax liability
  3. 3 Whether charges under ss 591C and 596A ICTA amounted to double taxation contrary to principle and the Human Rights Convention

Ratio Decidendi

The appellant was not solely entitled to the beneficial interest in the pension fund due to the possibility of other beneficiaries, so Saunders v Vautier did not apply. The payments were unauthorised and the principle in Re Hastings-Bass did not apply as the payments were not trustee decisions. However, if the appellant returns the funds to the scheme trustees, he is not liable to tax under s 596A ICTA. The charges under ss 591C and 596A are not double taxation as they are levied on different bases.

Court Disposition

Appeal under s 591C ICTA dismissed; appeal under s 596A ICTA allowed subject to return of funds; assessments under s 596A discharged accordingly.

Orders

  • Assessments under s 591C ICTA upheld and not discharged.
  • Assessments under s 596A ICTA discharged subject to appellant returning funds to the control of the scheme trustees including the pensioneer trustee.