Graham & Ors, R (on the application of) v HM Revenue and Customs

For DOTAS purposes, arrangements must be analysed by reference to the specific tax-avoidance arrangement entered into by each partnership, rather than by treating a series of similar partnerships as one umbrella scheme. Similar arrangements may nevertheless be covered by the statutory provisions allowing reliance on an earlier notification. A proposal made before the relevant transitional date does not prevent later, separately implemented arrangements from being notifiable where the statutory conditions are satisfied. The arrangements may therefore constitute DOTAS arrangements for the purposes of accelerated or partner payment notices.

The claimants participated in Liberty Partnerships or Liberty Syndicates and challenged Partner Payment Notices and Accelerated Payment Notices issued under the Finance Act 2014. By the hearing, the parties accepted that the grounds were largely answered by R (on the application of Rowe, Worrall and Others) [2015] EWHC 2293 (Admin) and Walapu v Her Majesty’s Revenue and Customs [2016] EWHC 658 (Admin).

The remaining issue was whether Liberty Fund Partnerships 5–8 were notifiable under the DOTAS provisions of the Finance Act 2004, having regard to the transitional provisions in regulation 1 of the 2006 Regulations, notwithstanding that the overall Information Memorandum had been made available before 1 August 2006.

1. The claim was dismissed. The only actively pursued ground failed.

2. For the purposes of section 308(3) of the Finance Act 2004, the relevant arrangements were the specific arrangements for each individual partnership. Each partnership had distinct partners, subscriptions, counterparties, dividends, alleged tax advantages, and rights and obligations. It was therefore inappropriate to treat all the partnerships as one umbrella arrangement constituted by the Information Memorandum.

3. The transitional provision in regulation 1(2)(b) of the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2006 concerned when the promoter first became aware of a transaction forming part of the notifiable arrangements. For Partnerships 5–8, that event occurred after 1 August 2006. The arrangements did not implement a proposal in respect of which notice had already been given under section 308(1).

4. The statutory scheme recognised that there could be several substantially similar sets of arrangements. Under section 308(5), Partnerships 6–8 could rely on a duly made notification for Partnership 5, without requiring separate notifications. This did not convert the separate partnerships into one arrangement.

5. The construction was consistent with section 219(3) and section 219(5) of the Finance Act 2014. The chosen arrangements and asserted tax advantage were those relating to each particular partnership. Each partnership consequently fell within the definition of DOTAS arrangements, so Condition C was satisfied.

6. The court was fortified by the substantially similar conclusion reached in Walapu v Her Majesty’s Revenue and Customs [2016] EWHC 658 (Admin). The claim was dismissed.

First-instance judicial review claim. No prior appellate history is stated in the judgment.