HM Revenue and Customs v Landsdowne Partners Ltd Partnership
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rimer,Lord Justice Etherton |
| Judgment Date | 15 February 2011 |
| Neutral Citation | [2011] EWCA Civ 251 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2010/2627 |
| Date | 15 February 2011 |
[2011] EWCA Civ 251
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(Mr Justice Lewison)
Before: Lord Justice Rimer
and
Lord Justice Etherton
Case No: A3/2010/2627
Mr Richard Coleman (instructed by HMRC's Solicitor's Office) appeared on behalf of the Applicants
The Respondent did not appear and was not represented.
Lord Justice Rimer:
This is a renewed application for permission for a second appeal, the Master of the Rolls having refused permission on the papers on 14 December 2010. The applicant is the Revenue, more formally the Commissioners for Her Majesty's Revenue and Customs. Mr Coleman has appeared before us, as he did below, for the Revenue and his very full skeleton argument and supplementary statement squarely recognised that permission to appeal will only be given if the appeal would surmount one or other of the CPR Part 52.13 hurdles. My Lord and I had concluded at the start of the hearing that this was a proper case for permission and so we have not had to trouble Mr Coleman to explain further why permission should be given, but, as we are giving permission for a second appeal, I should briefly give our reasons for doing so.
The proposed challenge is to Lewison J's order dated 18 October 2010 in the Chancery Division by which he dismissed the Revenue's appeal by way of Case Stated from a decision of the General Commissioners that, for the purposes of its partnership statement for the tax year ended 5 April 2005, the respondent, Lansdowne Partners Limited Partnership, a hedge fund manager, was entitled in computing its profits to deduct as expenses certain fee rebates paid to the partners; and, secondly, that the Revenue was anyway out of time in amending the Partnership's tax return. Lewison J agreed with the General Commissioners on the second point, which was fatal to the appeal, but had he not done so he would have remitted to the First-Tier tribunal for reconsideration the question relating to the deductibility of the claimed expenses. The amount of profits in issue is just over £2 million.
By the proposed appeal the Revenue seeks to challenge the judge's conclusion on the second point, which arises thus. Under the Taxes Management Act 1970 there are various gateways by which the Revenue may amend a partnership's tax return. In the circumstances of this case the amendment that the Revenue sought to make to the return on 27 August 2008 could only be justified, if at all, on the basis that, under section 30B(1), the Revenue or one of its officers had "discovered" an insufficiency in the return of profits. The passage through that particular gateway is, however, subject to conditions. The only condition which the Revenue claimed to have satisfied was that contained in section 30B(6), which Mr Coleman has described as the "lack of awareness" condition. That condition is linked to the time after which the Revenue has ceased to be entitled to give notice of an intention to enquire into the tax return via another gateway, which in the present case was 31 January 2007. In order to satisfy the "lack of awareness" condition the Revenue had to show that "an officer of the Board … could not have been reasonably expected, on the basis of the information made available to him before that time, to be aware of the situation mentioned in subsection (1) above." The situation there referred to...
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