Neil & Megan Gratton v Commissioners for Her Majesty's Revenue and Customs
Decision date: 28 October 2010
Neutral citation: [2010] UKFTT 521 (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
The tribunal considered transfers of Mr and Mrs Gratton’s UK personal pension funds to Guernsey RATS in July 1996 and whether those transfers were "authorised payments" under Scottish Equitable’s scheme rules and PS 121. It found the PS 121 conditions, notably the change‑of‑job requirement, were not met and so the transfers were not authorised; Schedule E assessments were upheld (Mr Gratton £58,650; Mrs Gratton £27,350). The tribunal directed that Scottish Equitable was not liable for PAYE and, on the facts, declined to impose penalties or interest.
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 treated compliance with the Inland Revenue’s PS 121 conditions — including the change‑of‑job requirement — as a precondition for a UK personal pension transfer to a Guernsey RATS to be "authorised" under the scheme rules; absent that compliance, a transfer cannot be treated as authorised for the purposes of Schedule E taxation and related scheme authorisation.
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 observed that a taxpayer acting on professional advice and relying on published local guidance may attract sympathy in penalty decisions, and that a transferor trustee may properly rely on advisers’ representations and paperwork when effecting transfers; lack of bad faith and full cooperation were material to the decision not to impose penalties or interest.