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I agree that situation is somewhat different in someone does not arrange their affairs properly when there was the opportunity to do so - in this case my response would (and should) also be tough.

However, the situation is somewhat different where the UK law would have denied you the relief if you had organised your affairs on the basis of illegitimate legislation - it is rather difficult for the taxpayer to prove it would have claimed the relief had it been able to, because the law specifically said such a claim would be denied. Denying the election would have been wrong - an election was not made but only because (and we have to say "only because," otherwise you are asking the claimant to prove something that is near impossible, although the claimant in DMG did manage to establish this to Park's satisfaction in the HC) the law would have denied it (wrongly). I think it must be superficial to look at the transaction only on the "it was due" basis in this particular situation.

I agree that legislation drafted like s247 is not always invalid and should not always be invalidated, and also that the IR are not always the bad guys! However, such drafting should not prevent a claim that would otherwise have been available, as it could be used artificially and this would provide an incentive to do so (or at least to draft more legislation in this way).

Best
Monica

On Mon, 16 May 2005 17:40:37 +0100 Robert Stevens wrote:

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.