Geoffrey Richard Haworth & Ors v The Commissioners for HMRC
| Jurisdiction | England & Wales |
| Judgment Date | 01 July 2025 |
| Neutral Citation | [2025] EWCA Civ 822 |
| Court | Court of Appeal (Civil Division) |
Neutral Citation Number: [2025] EWCA Civ 822
Case No: CA-2024-001186
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
Mr Justice Edwin Johnson and Upper Tribunal Judge Jonathan Cannan
[2024] UKUT 00058 (TCC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 01/07/2025
Before:
SIR ANDREW MCFARLANE, PRESIDENT OF THE FAMILY DIVISION
LORD JUSTICE NEWEY
and
LORD JUSTICE ARNOLD
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Between:
(1) GEOFFREY RICHARD HAWORTH
(2) IAN FRANCIS LENAGAN
(3) SG KLEINWORT HAMBROS TRUST COMPANY
(UK) LIMITED
(formerly known as KLEINWORT BENSON TRUSTEES
LIMITED)
(as Trustee of the IFL 1991 S&A TRUST)
Appellants
- and -
THE COMMISSIONERS FOR HIS MAJESTY’S
REVENUE AND CUSTOMS
Respondents
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James Rivett KC and Ben Elliott (instructed byLevy & Levy) for the Appellants
Christopher Stone KC and Hitesh Dhorajiwala (instructed by The General Counsel and
Solicitor to HM Revenue and Customs) for the Respondents
Hearing dates: 10 and 11 June 2025
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Approved Judgment
This judgment was handed down remotely at 10.30am on [date] by circulation to the parties
or their representatives by e-mail and by release to the National Archives.
.............................
Judgment Approved by the court for handing down.Haworth v HMRC
Lord Justice Newey:
1.This appeal concerns the meaning of “place of effective management” (or “POEM”)
as that phrase was used in the convention between the United Kingdom and Mauritius
(“the Treaty”) to which effect was given by the Double Taxation Relief (Taxes on
Income) (Mauritius) Order 1981 1981/1121 (“the 1981 Order”).
Basic facts
2.At the beginning of 2000, a family trust (“the GH Trust”) established by the first
appellant,Mr Geoffrey Haworth, held shares in a company called TeleWare plc
(“TeleWare”) and two family trusts (“the IFL Trust” and “the S&A Trust”)
established by the second appellant, Mr Ian Lenagan, held shares in a company called
WorkPlace Group Limited (“Workplace”). Each of the three trusts (“the Trusts”) had
been established more than a decade earlier, and their trustees were all resident in
Jersey.
3.A plan developed to merge TeleWare and Workplace and to list shares in the new
company on the London Stock Exchange. As things stood, capital gains tax (“CGT”)
would become due on gains which accrued to the Trusts in consequence. In the spring
of 2000, however, Mr Maslen, who was Mr Haworth’s tax adviser and also acted for
the Jersey trustees of the GH Trust for tax compliance purposes, and Mr Pentelow,
who was the tax adviser to Mr Lenagan and his family trusts, consulted counsel. They
were advised that CGT could be avoided if (a) the gains were realised at a time when
the Trusts had Mauritian trustees and (b) United Kingdom trustees were appointed
within the same tax year. Thereafter, Deloitte & Touche Offshore Services Limited
(“DTOS”) and Mr Chandra Gujadhur, a director of DTOS, were appointed as the
trustees of the GH Trust (with effect from 26 June 2000), the IFL Trust and the S&A
Trust (with effect from 30 June 2000 in each case) in place of the Jersey trustees.
DTOS and Mr Gujadhur (“the Mauritius Trustees”) were both resident in Mauritius.
4.The merger of TeleWare and WorkPlace proceeded, with the result that by the end of
July 2000 the Trusts had all become shareholders in the new company, TeleWork
Group plc (“TeleWork”). On 3 August, TeleWork was floated and the Trusts disposed
of most of their shares in the company.
5.On 24 October 2000, the Mauritius Trustees resigned as trustees of the Trusts, and
trustees resident in the United Kingdom (including the third appellant, now called SG
Kleinwort Hambros Trust Company (UK) Limited (“SGKH”)) were appointed
instead. The Trusts were all, therefore, resident in the United Kingdom for part of the
2000/2001 tax year. It is common ground, however, that, as a matter of Mauritian
domestic law, the Trusts were also resident in Mauritius during part of the year.
6.By amendments made to their tax returns for 2000/2001, HM Revenue and Customs
(“HMRC”) sought to impose CGT on Mr Haworth, Mr Lenagan and SGKH in respect
of the capital gains arising from the disposals of the Trusts’ shares in TeleWork. Mr
Haworth, Mr Lenagan and SGKH appealed, but in a decision dated 1 February 2022
([2022]UKFTT34(TC)))the First-tierTribunal(Tax Chamber)(JudgeHarriet
Morgan) (“the FTT”) dismissed the appeals. On 4 March 2024, the Upper Tribunal
(Tax and Chancery Chamber) (Edwin Johnson J and Upper Tribunal Judge Jonathan
Cannan) affirmed the FTT’s decision: see [2024] UKUT 58 (TCC), [2024] STC 436.
2
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