Burlington Loan Management DAC v The Commissioners for HMRC
Decision date: 22 August 2022
Neutral citation: [2022] UKFTT 290 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether Article 12(5) of the UK–Ireland tax treaty prevented an Irish-resident purchaser (BLM) from obtaining treaty relief under Article 12(1) for statutory interest on a claim it bought from SICL. The First-tier Tribunal found Article 12(5) does not require artificiality but does require that the relevant person’s main purpose was to take advantage of Article 12(1); applying that test the Tribunal concluded neither BLM nor SICL had that main purpose and so Article 12(5) did not bar relief. The Tribunal therefore allowed BLM’s appeal in respect of the SAAD Claim and ordered refund of the withheld tax.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal’s ratio is that Article 12(5) must be interpreted by ordinary meaning in context and in light of object and purpose (VCLT Article 31), and that the anti-abuse limb applies only where the relevant person had as a main purpose (or one of the main purposes) taking advantage of the specific treaty provision (Article 12(1)); the provision is not limited to cases involving artificial arrangements.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated (obiter) that unilateral parliamentary statements and an explanatory note to implementing domestic legislation were not admissible aids under VCLT Article 32 for treaty interpretation, and commented that a straightforward sale at market value by a seller expecting market price does not by itself amount to “taking advantage” of the purchaser’s treaty relief in the absence of other indicia of treaty-shopping or conduit arrangements.