Restitution Discussion Group Archives
| Sender: |
Robert Stevens |
| Date: |
Mon, 16 May 2005 14:35:55 +0100 |
| Re: |
Deutsche Morgan Grenfell v IRC |
Monica wrote
Whilst I accept that the fact that
the money was due causes a difficulty, the problem is the structure
of the tax law in this area. It is correct that the election had to
be made to obtain the relief and as the election was not made, the money
was due.
However, the only reason an election
was not made is due to the fact that the law did not permit it to be
made - incorrectly. Should the fact that someone did not claim because
the tax law wrongly said they could not, prevent a claim in unjust enrichment?
The Revenue has received the money in advance due to its law being incorrectly
framed and this has happened at the expense of the taxpayer. If there
had been an automatic exemption, there would be no issue - the tax would
simply not have been due further to Metallgesellschaft.
Should this change simply because the Revenue chose to use a mechanism
for such an exemption that allowed them to collect information earlier?
It was this argument which caused me to ask whether the
election was real. Looking at section 239 it seems to me that the election
is a real one.
The ability to carry back surplus ACT for up to six years
(originally - later reduced to only two years precisely to limit this
happening) found in s 239(3) provides a motive for not wishing to elect
to defer payment. If the election is not made the subsidiary pays ACT
and can carry it back against CT of these prior years up to the maximum
capacity. That CT is then refunded (with interest, as appropriate).
The situation could have arisen in practice. Perhaps
the group had no interest in paying dividends for some years but was profitable,
with plenty of distributable profits in the subsidiary but not higher
up. ACT capacity should be maximised when dividends are then paid.
If the election was a sham, why is it that in 247(3)
a partial election is possible?
RS
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