Bank of Ireland subsidiary loses £30m tribunal case

Bristol and West, the bank’s subsidiary, tried to take advantage of the novation rules in the Finance Act 2002 for transferring an in the money swap contract to Bank of Ireland Business Finance (BIBF), another of the bank’s subsidiaries, in return for a premium of £91m.

In Bristol and West v HMRC [2013] UKFTT 216 (TC), the tribunal heard how the bank expected the tax due to disappear due to the cancellation of the original swap contract and the replacement of a new one.

This was because Bristol and West...

Continued...

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Comments

The interesting bit of the article is ...    1 thanks

exceljockey | | Permalink

"The drafting of the relevant schedule in the 2002 rules was hotly debated, but the judge concluded, “Parliament cannot have intended... to let one company drop out of charge without the other inheriting the liability.”

- the judges are increasingly focusing on the spirit of the law and not the letter.

and the consequences are ?

hpyatt | | Permalink

exceljockey wrote:

- the judges are increasingly focusing on the spirit of the law and not the letter.

Which seems fine when it for the public good but the converse is the reason the letter of the law should always apply - otherwise the judiciary becomes a tool of the government of the day and/or "media opinion".

Quality

reilloc | | Permalink

exceljockey wrote:

"The drafting of the relevant schedule in the 2002 rules was hotly debated, but the judge concluded, “Parliament cannot have intended... to let one company drop out of charge without the other inheriting the liability.”

- the judges are increasingly focusing on the spirit of the law and not the letter.


That is not quite true. The reason why the judge was able to rule was because the meaning if the relevant schedule was contested. The clarification of unclear and contested legislation has been a role for the judiciary for a very long time. I think the real issue is that more and more legislation is unclear and we should really be discussing why that might be.My view is that there are two reasons for this. The first is that modern life is complex and laws reflect this only multiplied because they have to reference the volume of all relevant laws and precedents preceeding them. Secondly the civil service has been both dumbed down and politicised. This started with Thatchers "not one of us" approach to the middle and senior civil service continued by the Major/Blair/Brown/Condem governments combined with cuts in staffing levels despite increasing workloads. The result is poorly worded and ambiguous legislation, mainly accidentally but sometimes deliberately.