Joost Lobler v The Commissioners for Her Majesty's Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | MRS JUSTICE PROUDMAN DBE |
| Judgment Date | 26 March 2015 |
| Neutral Citation | [2015] UKUT 0152 (TCC) |
| Respondent | THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS |
| Appellant | Income Tax- ITTOIA 2005- effect of partial surrenders of insurance policies by individual- did claimant make a mistake for which rectification is available? Yes. Should s. 539 of ITTOIA or s. 50 of TMA 1970 be read so as to remove restrictions on deficiency relief or to reduce the tax payable? No. Can the FTT entertain the public law issues? No. UPPER TRIBUNAL TAX AND CHANCERY CHAMBER |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | FTC/72/2013 |
[2015] UKUT 0152 (TCC)
Case number: FTC/72/2013
Income Tax- ITTOIA 2005- effect of partial surrenders of insurance policies by
individual- did claimant make a mistake for which rectification is available? Yes.
Should s. 539 of ITTOIA or s. 50 of TMA 1970 be read so as to remove restrictions
on deficiency relief or to reduce the tax payable? No. Can the FTT entertain the
public law issues? No.
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
BETWEEN:
JOOST LOBLER
Appellant
and
THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND
CUSTOMS
Respondents
TRIBUNAL: MRS JUSTICE PROUDMAN DBE
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 19, 20 and 21
January 2015
Michael Firth, instructed by Smith Pearman, Chartered Accountants, for the appellant
Jonathan Davey, instructed by the Solicitor and General Counsel to HM Revenue and
Customs, for the respondents
Hui Ling McCarthy (who made written submissions pursuant to the direction of Judge
Greg Sinfield of 13 November 2014 under r.5 (3)(d) of the Upper Tribunal Rules 2008
(as amended) and who made oral submissions pursuant to the direction dated 19
January 2015 of Mrs Justice Proudman), for the Chartered Institute of Taxation
© CROWN COPYRIGHT 2015
2
DECISION
1. This is an appeal by the taxpayer Joost Lobler from the decision of Judge
Charles Hellier and Kamal Hossain FCA FCIB sitting in the First-tier Tribunal of
the Tax Chamber (“the FTT”). The FTT decided that it was unable to interfere
with the amendment made by HMRC to the Appellant’s tax return under 5 legislation (Chapter 9 Part 4 of the Income Tax (Trading and Other Income) Act
2005 (“ITTOIA”)) which treats prescribed sums arising in relation to policies of
life assurance as being liable to income tax.
2. The FTT dismissed the appeal with “heavy hearts” [28], and observed in [1],
[3] and [4] that: 10
“In this appeal a remarkably unfair result arises as a result of a
combination of prescriptive legislation and Mr Lobler’s ill-advised
actions…
He made no profit or gain as that term is commonly or commercially
understood and yet he becomes liable to pay tax which exhausts his 15 life savings and may bankrupt him. That is an outrageously unfair
result.
…The appeal takes place at a time when there is great media and
political comment about a fair tax system. That interest focuses on the
avoidance of tax by those who have substantial income, but to our 20 minds it is more repugnant to common fairness to extract tax in Mr
Lobler’s circumstances than to permit other taxpayers to avoid tax on
undoubted income.”
3. The legislation has also attracted serious judicial criticism in four other cases
in the FTT. 25
4. In this appeal Mr Firth appears for Mr Lobler and Mr Davey for the
Commissioners for Her Majesty’s Revenue and Customs (“HMRC”). Pursuant to
a direction of Judge Sinfield in the Upper Tribunal (“the UT”) under r.5(3)(d) of
the Upper Tribunal Rules 2008 (as amended) (“the Rules”) the Chartered Institute
Of Taxation (“the CIOT”) was permitted to make written submissions. 30
5. Observing on the first day of the hearing that the CIOT was present in the
person of (possibly among others) Ms McCarthy, its Counsel who had made those
written submissions, and believing that I should have the benefit of hearing her
submissions in detail and that both parties should have the opportunity to respond
to them fully, I gave a direction that she be permitted also to address this Tribunal 35 orally. The CIOT’s interest is that further appeals, claims for judicial review and
other disputes with HMRC, where taxpayers face similar consequences to those
affecting Mr Lobler, have been stayed pending the outcome of this appeal. In its
application under r.5 (3)(d) of the Rules the CIOT gave details of some of those
other cases. The CIOT is in the process of gathering information from other 40
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