HMRC defeats tax QC's own scheme at tribunal

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A specialist tax barrister recently lost a first tier tribunal appeal against HMRC’s decision not to allow him to claim tax relief on a £475,000 loss on an avoidance scheme of his own devising.

Rex Bretten QC, who retired around 18 months ago from Tax Chambers at 15 Old Square, designed a scheme that involved setting up two trusts in which he invested £500,000 in loans raised against what are known as relevant discounted securities (RDS). The arrangement created a £475,000 loss against which he tried to claim £190,000 relief.

While the loan arrangements were fairly simple, the interpretation of their legality was much less straightforward. In a what might be termed a 2-1 points decision in the case of George Rex Bretton QC v HMRC [2013] UKFTT 189 (TC), tribunal judge Barbara Mosedale ruled in March that the transactions were caught by anti-avoidance provisions (paragraph 9A) in schedule 13 of the Finance Act 1996 that applied at the time of Bretten’s initial appeal.

Bretten represented himself at the tribunal hearing in January, and the case was given an added twist by Public Accounts Committee chair Margaret Hodge, who named Bretten as one of a handful of tax QCs who “prostitute themselves” to schemes designed to deliberately create gross tax relief for investors.

In February 2003, Bretton became joint trustee...

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About John Stokdyk

John Stokdyk is the global editor of AccountingWEB UK and


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16th Apr 2013 09:01

Well done, HMRC :)

Any penalties? Has he lost anything really?. He has managed to illegally hold onto the tax for 10 years, and it has cost him little in the way of defence costs.

What cost to the country, though? Until there is a positive deterrent the risk still seem to be worth taking as the potential gains are huge, but as in this case, the potential losses are minimal.

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16th Apr 2013 10:18

Oh, the irony...

Just goes to show the truth of the old adage "A man who is his own lawyer has a fool for a client"

Well done HMRC!

My only observation is that this tax cheats claim relates to 2003. Why does it take 10-years to find a man guilty for perpetrating such a grotesque fraud against the public treasury?

I realise that interest and penalties will mitigate this, but justice deferred is justice denied.

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16th Apr 2013 15:15


I wonder if this is the same chap who is always quoted when tax scheme promoters tell you the tax position has been agreed by a QC!

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to andy.partridge
17th Mar 2015 15:51


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