Commissioners of Inland Revenue v Botnar
| Jurisdiction | England & Wales |
| Judgment Date | 23 June 1999 |
| Date | 23 June 1999 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal.
Before Lord Justice Morritt, Lord Justice Aldous and Lord Justice Mance
Income tax - settlement income could benefit taxpayer - anti-avoidance provisons applicable
A scheme involving the transfer of shares owned by the taxpayer into a trust fund in Liechtenstein failed in its object because of the anti-avoidance provisions of section 478 of the Income and Corporation Taxes Act 1970: see now, sections 739 to 746 of the Income and Corporation Taxes Act 1988.
Notwithstanding a clause in the settlement expressly excluding the taxpayer from entitlement to benefit under the trust, the wide dispositive powers of the trustees over the capital of the fund were exerciseable so as to confer on the taxpayer entitlement to beneficial enjoyment of settlement income under section 478(5)(a) and (d) of the 1970 Act.
The Court of Appeal so held in reserved judgments dismissing the appeal of the taxpayer, Mr Otto Botnar, from the judgment of Mr Justice Evans-Lombe ((1998) STC 38) allowing the Crown's appeal from a determination of special commissioners in respect of assessments to income tax for the years from 1974-75 to 1989-90.
Mr Botnar died in July 1998 and the appeal was carried on by Dr Peter Lenz, a Swiss lawyer.
Section 478 is headed "Provisions for preventing avoidance of income tax by transactions resulting in the transfer of income to persons abroad" and provides:
"(1) Where by virtue or in consequence of any such transfer … an individual has, within the meaning of this section, power to enjoy, whether forthwith or in the future, any income of a person resident or domiciled out of the United Kingdom...
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Re The X Trusts
...counsel attempted (unsuccessfully) to rely on counsel's prior opinions in the construction of a charitable trust deed; and IRC v Botnar[1999] STC 711 at [15], where Morritt LJ endorsed (and both sides acknowledged the correctness of) the trial judge's decision that a memorandum prepared by ......
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The X Trusts
...counsel attempted (unsuccessfully) to rely on counsel's prior opinions in the construction of a charitable trust deed; and IRC v Botnar [1999] STC 711 at [15], where Morritt LJ endorsed (and both sides acknowledged the correctness of) the trial judge's decision that a memorandum prepared by......
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Brazzill and Others v Willoughby and Others
...commonsense, it must be made to yield to business commonsense. ” 131109. These principles apply to trust documents also see IRC v Botnar [1999] STC 711 per Mance LJ as he then 132110. These principles are now well known and all parties accept that they apply to the construction of the Notic......
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Chartbrook Ltd v Persimmon Homes Ltd and another
...been the ratio of any decision: see, e.g. Ham v Somak Travel Ltd, February 4, 1998, unreported (CA); IRC v Botnar [1999] EWCA Civ 1652, 72 TC 205; Proforce Recruit Ltd v The Rugby Group Ltd [2006] EWCA Civ 125 In Proforce Recruit Ltd v The Rugby Group Ltd [2006] EWCA Civ 69 the relevant phr......
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INTERPRETATION OF CONTRACTS AND THE ADMISSIBILITY OF PRE-CONTRACTUAL NEGOTIATIONS
...Perry Ltd v Stroud, 25 May 2000, Court of Appeal; Nella v Nella, 23 July 1999, Chancery Division, Inland Revenue Commissioners v Botnar[1999] STC 711; (1999) 72 TC 205. 25 Supra n 4. 26 [2001] 1 NZLR 523. 27 [2004] 1 NZLR 1. 28 A claim was initially made against Comtech but it was not pursu......