Redevco Properties UK 1 Limited v The Commissioners for HMRC

Decision date: 21 July 2023

Neutral citation: [2023] UKFTT 655 (TC)

Overall AI summary confidence: high

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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 UK “exit charge” timing rules applied on a 2008 corporate migration breached EU freedom of establishment by denying a deferral option, and what remedy followed. The Tribunal held the Exit Charge Provisions were incompatible with EU law and adopted a conforming construction of s49D TMA to permit payment in five equal annual instalments where Art 49 TFEU would otherwise be infringed; Redevco’s appeal was allowed only as to an agreed unlawful balancing charge and otherwise dismissed. The Tribunal also rejected Redevco’s factual claim that migration depended on counsel’s advice.

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: medium

Where domestic tax timing provisions infringe EU freedom of establishment by denying a deferral option, a tribunal may, if that construction is consistent with the statutory language and no more than necessary to secure EU compliance, read into the provision an option to defer payment by instalments (in this case five annual instalments). Conforming interpretation must not contradict a cardinal feature of the statute or involve judicial choices inappropriate for the court.

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 noted that judicial comity requires following prior similar FTT decisions (eg Panayi) unless clearly wrong; that legitimate expectation or legal certainty will not defeat a conforming construction absent evidence of a reasonable expectation of non‑enforcement; and that conforming interpretations can operate retrospectively to declare what the law has always meant.