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So, on your view what would have been the approach if a UK company with a UK parent had failed to read section 247 correctly and thought that it could not elect to defer? It pays and then, realising its mistake, subsequently seeks restitution. Are you really arguing that the company can argue "If I had not mistakenly read the statute I would have elected to defer, therefore make restitution to me"?

Although the money is mistakenly paid, it was due. Tough.

If denying the election is a wrong, it is actionable.

If denying the election is not a wrong: tough.

I see no ground of public policy for invalidating tax statutes drafted in the form of section 247, unless they are invalidated under some EU law or (implausibly) that they offend the Human Rights Act in some way. This is just a matter for Parliament.

The IRC are not always the baddies.

RS

Charles Mitchell writes:

OK I understand what you mean by distinguishing 'real' and 'sham' elections now.

But Monica's point still stands that the source of the DMG difficulty is that the statutory scheme imposed liability and then required the taxpayer to take positive steps to bring itself within an exception in order to avoid paying the tax. Her further point also stands that this general approach is replicated in many other tax statutes and that it would be undesirable to let the Revenue escape restitutionary liability across the board wherever tax liability is incurred on a 'liable until proved innocent' basis. This seems to me to be true whether or not the taxpayers in each of these situations could have had 'real' reasons for not making an election to escape liability.