Home › Forums › Patrick Cannon › When will courts take a purposive approach to the SDLT legislation?
- This topic has 2 replies, 1 voice, and was last updated 15th April 2018 at 8:22 am by Adrian Watson.
I am sure I read recently (but cannot for the life of me find it again now!) that the Revenue had recently argued AGAINST the purposive approach in a tax avoidance case, and won, but the significance of this was that the Court laid down some clear principles of when this approach was and was not appropriate, which in fact has now limited the Revenue’s opportunities to argue for it. Sweet. Can you help me find it again please?PatrickGuest
You may be thinking of Gripple. As you suggest support for the view that SDLT is not subject to a strong purposive approach can be found in Gripple v HMRC  EWHC 1609 (Ch) where although it wasn’t an SDLT case, Henderson J. said:
?The schedule runs to 26 paragraphs and occupies ten pages in Tolley?s Yellow Tax Handbook for 2005-2006. I emphasise this point because one of Mr. Gordon?s submissions for Gripple is that the schedule evinces a general intention to provide enhanced relief for expenditure on R&D, and that a generous construction should where possible be adopted in order to further that general aim. I am unable to accept this submission. It seems to me, on the contrary, that a detailed and prescriptive code of this nature leaves little room for a purposive construction, and there is no substitute for going through the detailed conditions, one by one, to see if, on a fair reading, they are satisfied.?
SDLT is clearly a ?detailed and prescriptive code? and it is therefore reasonable to think the application of the Ramsay approach is constrained by this fact in its application to SDLT.
This was a surprising line of argument from HMRC and although Keith Gordon (for the taxpayer) was shot down heroically in this case his sacrifice may not have been in vain when one considers the wider implications of Mr Justice Henderson’s insightful decision. One wonders however if the honourable judge was smiling to himself as he sided with HMRC.Adrian WatsonGuest
Thank you! This does indeed look like the case I was thinking of. With the huge volume of legislation relating to all taxes, not just SDLT, and the tendancy towards such detailed prescriptiveness, one wonders whether the purposive approach will become more limited in its application. One can hope, I suppose.