No breach of Arron Banks’ human rights on UKIP donations

The Upper Tribunal (Tax and Chancery Chamber) today dismissed the appeal of Arron Banks against a decision of the First-tier Tribunal (FTT) which upheld an assessment to inheritance tax (IHT). Mr Banks made donations to UKIP in 2014 and 2015 totalling around £1m, sourced from his personal funds and through a company that he controlled. It was common ground that the donations would be subject to the IHT charge unless they came within the exemption for donations to political parties (s.24 IHTA 1984). At the relevant time, donations to UKIP did not qualify for the exemption because UKIP did not have an MP who had been elected in the previous general election. Relying on rights conferred on him by the European Convention of Human Rights (ECHR) and the law of the European Union, Mr Banks claimed to be entitled to the exemption anyway. 

At first instance, the FTT had found that, in breach of Article 14 ECHR taken with Article 1 Protocol 1, the s.24 criteria indirectly discriminated against Mr Banks because of his political opinion, and that the discrimination could not be justified. However, it concluded that it was not possible to interpret the legislation so as to avoid the discrimination and dismissed the appeal.

Mr Banks appealed to the Upper Tribunal. Challenging the FTT’s conclusions by Respondents’ Notice, HMRC contended that there was no discrimination and that in any event any difference in treatment was justified. The Upper Tribunal (Falk J and UT Judge Herrington) agreed with HMRC on all points. The legislation was not directly discriminatory and Mr Banks had failed to establish any indirect discrimination. Further, the measure pursued a legitimate aim and was justified – whether applying a ‘manifestly without reasonable foundation’ test or a ‘fair balance’ test – and the FTT had been correct to conclude that it was not possible to interpret the legislation in the way for which Mr Banks contended.

The Upper Tribunal also rejected the appeal concerning EU law rights (finding that the Articles relied upon had no direct effect, and that there was no breach anyway) and concerning Mr Banks’ rights under Articles 10 and 11 ECHR.

The Decision can be read here.

Chris Stone represented HMRC, assisted in the preparation of the appeal by Ishaani Shrivastava.

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