Aparna Nathan QC and Ishaani Shrivastava successful in defending judicial review challenge

In Murphy & Anor v Revenue and Customs [2021] EWHC 1914, Aparna Nathan QC and Ishaani Shrivastava, representing HMRC, were successful in the High Court defending a judicial review challenge to the construction of Extra Statutory Concession B18, namely, whether, as HMRC submitted, the ESC limits the amount of credit which may be claimed by a UK beneficiary for the UK tax paid by a non-UK resident trustee of an offshore discretionary trust to the amount of tax paid by them on UK source income which arose to the trustees not earlier than six years before the end of the year of assessment in which the payment was made (“six year income limit”). 

Chamberlain J held that on a proper interpretation of ESC B18, the six year income limit applied to income distributions to UK resident beneficiaries from non-resident trustees in receipt of UK source income. In so holding, Chamberlain J had regard to the language and structure of ESC B18 as well as wider statutory scheme relating to payments from discretionary trusts (ss686,687 and 809 ICTA 1988; now found in ss493-498 ITA 2007 and s111 et seq TIOPA 2010). The judgment helpfully summarises the principles of construction applicable to the interpretation of extra statutory concessions (see [26]-[33]; [55]-[57]). 

To read the full judgment, please click here.

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