Membership of the Revenue Bar Association

My application for membership of the Revenue Bar Association has been accepted.
Tax Appeals – From January, I am available to be consulted and instructed as an advocate by a member of the:
(i) Chartered Institute of Taxation;
(ii) Institute of Chartered Accountants in England and Wales; and
(iii) The Chartered Association of Certified Accountants,
under either the RBA:
(a) ‘Joint Advisory Scheme’; or
(b) ‘Special Advocacy Scheme’.
For more information please visit
As an accredited Mediator I am also available to be appointed as Mediator or Co-Mediator for a Tax Dispute.
I have been commissioned by Trusts & Trustees (Oxford University Press), to write an in-depth article entitled, ‘Mediation of Probate Trust & Tax Disputes – Challenges & Tools’, which I am aiming to complete before the end of October.
I am also a full member of STEP, and a member of the Chancery Bar Association.

Are we approaching an economic tipping-point?

In August I wrote a Blog about ‘The embedded structural cost of tax cuts’. Find using the ‘search’ box at the top of this page or under August in the indeax of blogs on the right hand side of the page.

In the blog I observed that official forecasts in 2017 implied that lower tax rates for the self-employed and company owner managers relative to employees will cost about 15 billion in 2021-22. If there are tax cuts, that cost will rise. Independently, and in parallel, the cost of government borrowing may increase. UK general government gross debt exceeds £2,365.4 billion (Quarter 1 – Jan to Mar 2022) = 99.6% of gross domestic product (GDP), see my previous blog ‘What is the economic impact of Brexit on the cost of living crisis?’ ‘[HMRC] research highlights that most [SME] owners … are not employing others, investing or growing – let alone doing anything that produces positive ‘spill-overs’ to wider society. … This serves to demonstrate how poorly targeted the tax breaks are.’ (‘Principles and Practice of Taxing Small Business’, by Stuart Adam and Helen Miller, Chapter 5 of ‘The Dynamics of Taxation’, edited by Glen Loutzenhiser and Rita de la Feria).

£50bn (not taking any account of the £15bn I mentioned) will increase GND by 2.1%. [An article in the Observer Newspaper that day stated], ‘Truss, … has gone much further, pledging tax cuts she claims will cost £38bn annually, but which economists believe could actually cost more than £50bn a year. She claims this will promote growth, but these kinds of tax cuts will do nothing to address the real reasons for Britain’s dire productivity growth – a lack of investment in infrastructure, skills and other forms of capital – while significantly reducing the resources available for public services at a time when inflation is eroding the real value of budgets in hospitals, schools and care homes. Most of the conversation about the cost of living crisis has, understandably, been framed through the lens of household budgets. But it will have just as damaging an impact on Britain’s public services. … Inflationary pressures, including higher wage bills and energy costs, are predicted to cost the NHS billions this year.’ If this economic analysis proves to be correct, then:
(i) tax cuts will not increase economic growth; and
(ii) the economic cost of cuts will be GND = 101.71% of GDP.
That is an economic tipping point.

Excluded from the calculation is the reduction of revenue (i.e. to fund public services) which resulted from BREXIT. Figures produced by the Centre for European Reform show that by the end of 2021, the UK economy was 5% – or £31 billion – smaller than it would have been if the UK had stayed in the EU. ‘The CER’s analysis shows that Brexit has cost the UK billions of pounds in lost trade, lost investment and lost tax revenues.’ (ITV News Business and Economics Editor Joel Hills 10.06.2022). The Government’s mini-budget has been estimated to contain total tax cuts of £45 billion by 2026/27. What is the actual cost of the tax cuts announced today?

What is the social cost, i.e. what signal does it send if a Government:
(i) passes laws to restrict access to welfare benefits during a recession & cost of living crisis;
(ii) passes a law encouraging reckless speculation by Bankers;
(iii) gives what is estimated to be a £55K hand out to every millionaire; and
(iv) passes laws making it illegal to strike.
Answer – The Government does not care about “us”. It is looking after “them.”

In other words, the social cost is an even more divided society.

Sending out this message is not a catalyst for economic growth.
Instead, could it turn out to be a potential catalyst for general strikes and civil unrest?

Are we heading back to 1973?

If I am right, and I really hope that I am wrong, and that the new Government is economically competent, could this also be political suicide for the Conservative Party? Will the red wall collapse?

As I write, gilts are in freefall and sterling is dropping off a cliff! Unless this is put into reverse, it appears that the market is not confident that the mini-budget will result in stable conditions for investors. In which case, if the market is proven to be right, what was the point of the tax cuts?

‘The Chancellor’s massive package of tax cuts will boost growth in the short term but drive up interest rates and spark an additional £411bn of borrowing over five years, a major think tank has warned.

The Resolution Foundation, which analysed the numbers in the absence of an official OBR forecast, said the worsening economic outlook and new energy support are estimated to have increased borrowing by £265bn over the next five years.

Tax cuts of £146bn raise that to £411bn – the biggest increase in borrowing by any Chancellor.

Torsten Bell, chief executive of the Resolution Foundation, said: “Without significant cuts to public spending, debt will be on course to rise in each and every year. 

“This is not what sustainable public finances look like. Every scrap of Treasury orthodoxy has been torn up.”’ [The Telegraph Newspaper 23.09.2022 at 3.34pm].

‘The Institute of Fiscal Studies (IFS) said he was “betting the house” by putting government debt on an “unsustainable rising path”. Only those with incomes of over £155,000 will be net beneficiaries of tax policies announced by the Conservatives, with the “vast majority of income taxpayers paying more tax”, said the respected financial think tank in a scathing assessment of the plans.

The Resolution Foundation think tank said the chancellor’s measures would involve an extra £411bn of borrowing over the next five years.

It said the tax cuts do very little to boost the incomes of those who need it the most, pointing out that someone earning £1m a year would gain more than £55,220 a year, while someone on £20,000 would gain only £157.’ (Sky News 24.09.2022).

See also: Mini-Budget response | Institute for Fiscal Studies (

‘Our findings on the effects of growth and unemployment provide evidence against supply side theories that suggest lower taxes on the rich will induce labor supply responses from high-income individuals (more hours of work, more effort, etc.) that boost economic activity … they also show little support for the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost wider economic performance. They are, in fact, more in line with recent empirical research showing that income tax holidays, windfall gains and tax cuts targeted at the top decile of the income distribution do not lead individuals to significantly alter the amount they work. …

Overall, our analysis finds strong evidence that cutting taxes on the rich increases income inequality but has no effect on growth or unemployment. …

Our results have important implications for current debates around the economic consequences of taxing the rich, as they provide strong evidence that cutting taxes on the rich increases top income shares, but has little effect on economic performance. These findings are in line with a growing pool of macro-level panel studies on the economic consequences of cutting top marginal rates of income taxation.’ (‘The economic consequences of major tax cuts for the rich.’), by David Hope & Julian Limbergg, Socio-Economic Review, Volume 20, Issue 2, April 2022, Pages 539–559).

economic consequences of major tax cuts for the rich | Socio-Economic Review | Oxford Academic (

The market is betting on failure. ‘Speculators have ramped up bets against the pound after sterling fell to its lowest level against the dollar in nearly four decades. Investors are betting on a further fall amid concerns that the new Government will need to borrow more to fund its economic growth plan. That includes an energy package for households and business costing up to £150billion. The pound’s value has dropped almost 8 per cent against the US dollar in the past month. It has now shed 20 per cent of its value against the greenback since January – hitting $1.09 on Friday. This shows there are almost 55,000 contracts out against sterling. … The Bank of England increased the cost of borrowing by half a percentage point to 2.25 per cent last week in an effort to tame rampant inflation, running at just under 10 per cent. [A] weak pound can fuel inflation as it increases the price of imports like oil or products made in China, such as clothing. ‘Tax cuts are not a guarantee of a sustained boost to growth,’ said Jane Foley, head of foreign exchange strategy at Rabobank.’ (Speculators ramp up bets against pound after sterling falls to lowest level against dollar in nearly four decades Patrick Tooher, Financial Mail On Sunday).

‘British companies are braced for higher costs after sterling tumbled to a record low on Monday, with the prospect of an accelerated rise in interest rates also weighing on industries such as housebuilding. Sectors including retail, hospitality and aviation are affected by the falling pound, which will make imports of commodities and goods more expensive for many companies already facing a cost-of-business crisis. “The dollar is very, very strong . . . and it has an effect,” said easyJet chief executive Johan Lundgren. “We have lots of expenses in dollars and we have revenues coming in pounds.” About 40 per cent of airlines’ operational costs are in dollars, including jet fuel and maintenance. Kate Nicholls, chief executive of UK Hospitality, which represents pubs, restaurants and hotels in the UK, said “a weak pound was not helpful for companies across the sector”. Smaller businesses, which are less likely to have in place hedges against currency movement, also expressed alarm about the lack of stability.’ (‘UK business braced for higher costs as sterling falls’ published in the FT 26.09.2022).

‘The savage sell-off in the pound in east Asia overnight was further evidence – should any be needed – that confidence in the new Liz Truss government is rapidly draining away. Sterling fell to its lowest level against the dollar, and despite an attempt at a rally in early London trading, the likelihood is that parity against the dollar will be tested before long. [O]nce a currency hits the skids it is hard to stop it. Momentum trading took over in the aftermath of Kwasi Kwarteng’s mini-budget and it has proved hard to halt. Kwarteng committed a schoolboy error by pledging further tax cuts in a full budget planned for later this year. If the markets are worried about the state of the government’s finances and the increase in borrowing needed to fund your plans, it is not the wisest course of action to add to those concerns. Kwarteng’s inexperience has been exposed.
Threadneedle Street raised interest rates by half a point last Thursday but there has been speculation of an emergency meeting of the Bank’s monetary policy committee as early as Monday.’
(‘Kwasi Kwarteng refuses to comment as pound hits all-time low against dollar’ Guardian Newspaper 26.09.2022). Kwasi Kwarteng refuses to comment as pound hits all-time low against dollar | Kwasi Kwarteng | The Guardian

‘Letters of no confidence in the premiership of Liz Truss have begun stacking up amid panic over her government’s economic proposals, a former Conservative minister has claimed.
An ex-minister in Boris Johnson’s government told Sky News that the letters which could trigger a confidence vote have already been sent to 1922 Committee chair Sir Graham Brady.
The MP accused Truss and her Treasury ministers of “playing A-level economics with people’s lives”, adding: “The issue is government fiscal policy is opposite to Bank of England monetary policy – so they are fighting each other. What Kwasi gives, the Bank takes away … You cannot have monetary policy and fiscal policy at loggerheads.”
It comes after the pound plunged by nearly five per cent to an all-time low as investors ran for the exits in the wake of the new government’s fiscal plan.
The currency tumbled to an unprecedented $1.0327, extending a 3.61 per cent dive from Friday when finance minister Kwasi Kwateng unleashed historic tax cuts’.
(‘Pound – live: Tories ‘submit no-confidence letters in Liz Truss’ as sterling falls’ The Independent at 14:45 26.09.2022).

‘The plummeting value of the pound has sent the interest rate on government debts to a 12-year high, with money markets now predicting the Bank of England base rate could almost treble to 6% next year. Traders expect the central bank to convene a meeting of its monetary policy committee (MPC) soon to hike interest rates from 2.25% to 3% before increasing them further at a scheduled meeting in November. One analyst described sterling’s situation as “toxic”, while another said investors had digested the implications of Friday’s mini-budget, … and “seemed inclined to regard the UK Conservative party as a doomsday cult”. A further rout of the British currency could take it below parity with the dollar and into uncharted territory on international exchanges. … [S]everal MPC members have highlighted the fact that a drop in the value of the pound can fuel inflation via the higher cost of imported goods and raw materials’.
 (‘Markets warn sterling slump could lead UK interest rates to triple by next year’, the Guardian at 15:30, 26.09.2022). Markets warn sterling slump could lead UK interest rates to triple by next year | Interest rates | The Guardian

‘The Bank of England is understood to be preparing an intervention after the pound crashed to an all-time low against the dollar. The Bank is expected to issue a statement as soon as today amid mounting pressure on Governor Andrew Bailey for an intervention to help shore up the economy. This could be a verbal intervention to calm markets or, in a more extreme case, an unscheduled increase in interest rates – which were raised to 2.25pc just last week. It is understood that a statement today is probable, but not definite. The Bank declined to comment on the nature of any intervention. The possible intervention comes amid market turmoil after Chancellor Kwasi Kwarteng last week unveiled the biggest package of tax cuts in 50 years and hinted at more to come. The measures, which include scrapping the additional rate of income tax and cutting stamp duty, are aimed at fuelling economic growth. But markets have been spooked amid fears Prime Minister Liz Truss is pushing up public borrowing to unsustainable levels. (‘Bank of England preparing emergency intervention after pound slumps to all-time low – live updates’, the Telegraph, 15:40, 26.09.2022).

See also:

Britain sends investors fleeing with historic tax cuts and borrowing | Reuters

Brexit: UK pound has not crashed yet, but here’s why it will probably suffer in years to come (

Why did the British pound collapse? A look back at economic history. | Fortune

How has Brexit affected the value of sterling? – Economics Observatory

U.K. could trigger a global crisis as pound collapses while bond yields soar, Larry Summers says (

Liz Truss and Kwasi Kwarteng ‘ignored warnings’ from officials their mini-Budget would spark market chaos (

Bank of England takes emergency action to prevent ‘material risk’ to UK financial stability (

Pound tumbles despite Bank of England intervention in markets – business live (

Bank’s £65bn move driven by pension fund panic – BBC News

New UK Chancellor of the Exchequer announces significant tax cuts | STEP

Update on Growth Plan implementation – GOV.UK (

Bespoke structuring of a Contentious Probate/Trust mediation

As I explain in paragraph 1.3 of my book, the
‘Contentious Probate Handbook’ (published by the Law Society in 2016), ‘From the outset, and throughout the conduct of the case, it is incumbent upon a practitioner to evaluate the client’s costs/risk calculus and the benefits of proposing/engaging in ADR. To obtain a quick indication you can roughly estimate the cost of your client getting what he or she wants (i.e. if he or she wins), and factor in the litigation risks. Even if your client wins, and nothing is absolutely certain in litigation, where an executor is entitled to an indemnity out of the estate for costs properly incurred, the capital value of the estate will have been diminished by legal costs and experts’ fees incurred in the litigation. Lose, and your client ends up in negative equity. Then compare the costs of ADR with the costs of a trial.’
While solicitors are the gateway to mediation, in practice there are 3 obstacles:
(i)          a participant [‘P], i.e. a lay client, may not understand that Mediation can save them money where it is an opportunity to transform the dispute into a joint problem solving exercise by applying estate & business succession planning principles to discover & unlock tax efficiency post-death, resulting in the consequential enlargement of the estate/trust fund pie for settlement &
(ii)        a mediation advocate [‘MA‘] may not understand that the most important person in the room is their client, i.e. because it is P‘s case; and that their job is to help P resolve the dispute in a cost-efficient manner, i.e. sooner rather than later; and
(iii)       the MA, may not be qualified as a TEP, or have sufficient knowledge of tax law & estate planning principles.
A mediation structuring technique which can help move the P‘s and their MA’s along the path to settlement in a face to face or online mediation, is for the mediator to make two pre-mediation zoom calls instead of one:
1st – with each P‘s MA (without their client present), to understand what brought the P‘s to the table and vice versa, what kept them away until now, e.g. lack of understanding about mediation/ psychological aversion & refusal by P to mediate; and

2nd – with each P in the presence of their MA (which would usually take place anyway to test the link in an online mediation), to enable:
(a)  each P and their MA to prepare to do a deal; and
(b)  afterwards for a conversation to take place between each P & their MA about how best to prepare to do a deal.
Please feel free to contact me if you would like to have a no-obligation telephone discussion about mediation. I have been invited
by the Law Society to draft a 2nd edition of the book, and in December will be drafting the chapter structure for submission to the Law Society for approval. This will include an expanded section on ‘efficient mediation’ & ‘effective mediation advocacy.’

Confusion amongst contentious probate practitioners about the duties owed by an executor in relation to land

There appears to be some confusion amongst contentious probate practitioners about the duties owed by an executor in relation to land. An executor is not under a duty (i.e. any legal compulsion) to sell land, because s.2 of the Trusts Of Land And Appointment of Trustees Act 1996 clearly and unequivocally states:
‘Abolition of doctrine of conversion.  
(1)           Where land is held by trustees subject to a trust for sale, the land is not to be regarded as personal property; and where personal property is subject to a trust for sale in order that the trustees may acquire land, the personal property is not to be regarded as land.
(2)           Subsection (1) does not apply to a trust created by a will if the testator died before the commencement of this Act.
(3)           Subject to that, subsection (1) applies to a trust whether it is created, or arises, before or after that commencement.’ Executors are statutory trustees of land, s.1(i)(a) Trusts Of Land And Appointment of Trustees Act 1996. Where Box 10 of an HM Land Registry form TR.1 declares that executors ‘hold the property on trust’, they hold the property on an ‘express trust of land’, i.e. as trustees. The duties of executors, trustees, and trustees of land are the same in relation to land, see Byrnes v Kendle [2011] HCA 26, (2011) 243 CLR 253, at paragraphs 67 and 119, which was cited in Brudenell-Bruce v. Moore [2014] EWHC 3679 (Ch), by Mr Justice Newey at 88. Trustees must manage trust property for the benefit of the beneficiaries, i.e. ‘they should let or relet trust realty … where that is the appropriate mode of making the property beneficial to the trust’ [Lewin on Trusts, Twentieth Edition (2020), paragraph 34-055], because ‘they are also under a duty to seek a renewal of the lease if a renewal would be beneficial to the trust’ [Lewin, paragraph 34-055], i.e. where property is retained when it is imprudent to sell it. That is because, ‘The overriding obligation of trustees is ordinarily to preserve and safeguard the trust property’ [Lewin, paragraph 34-001]. Trustees may therefore be obliged to generate income from land comprised in the trust, Brudenell-Bruce v. Moore [2014], at 88. ‘Trustees are bound to sell at the best price reasonably obtainable…’ [Snell’s’ Equity, 34th edition (2020), paragraph 28-009]. Trustees must act prudently, because ‘… if they contract under circumstances of haste and improvidence, they may be personally liable for the loss’ [Lewin, paragraph 37-034]. ‘Trustees must be careful not to sell under unnecessarily depreciatory conditions’, [Snell, paragraph 28-10]. In relation to the exercise of their powers of investment, executors are trustees for the purposes of the Trustee Act 2000 (see s.28).

Test to be applied in a claim for unreasonable costs in the FTT

There are three scenarios in which the FTT can make a costs order:

  • Wasted costs.
  • Unreasonable conduct.
  • Complex cases, i.e. where a case has been allocated to the Complex case category under r.23.

In GC Field & Son Ltd & ors v. HMRC [2022] UKFTT 00314 (TC), which was an application for costs in the FTT, Judge Amanda Brown QC stated the following principles in relation to the test to be applied in a claim for unreasonable costs:

  • Rule 10(1) FTT Rules provides: ‘(1) The Tribunal may only make an order in respect of costs (or, in Scotland, expenses): (a) under section 29(4) of the 2007 Act (wasted costs) …

(b) if the Tribunal considers that a party or their representative has acted unreasonably in bringing, defending or conducting the proceedings.’

  • The FTT Rules do not provide for the payment of costs in standard category appeals.
  • ‘[T]he general rule … is that there should be no order for costs”. MG v Cambridgeshire County Council [2017] UKUT 00172 (ACC) at paragraph [26].
  • Where the Tribunal identifies that there had been unreasonable conduct in the proceedings there is a discretion and not an obligation for the Tribunal to award costs (see Tarafdar v HMRC [2014] UKUT 0362 (TCC).
  • The question of the threshold for unreasonableness was considered in the context of the tax tribunal by the Upper Tribunal in Market & Opinion Research International Ltd v HMRC [2015] UKUT 12 (TCC) (MORI).
  • The UT endorsed the summary by the FTT of what might constitute unreasonable conduct.
  • Acting unreasonably may take the form of a single piece of conduct and may include an omission.
  • The test does not preclude the possibility that there were a range of reasonable ways of acting rather than only one.
  • Wrong assertions are not automatically unreasonable.
  • Rule 10(1)(b) FTT Rules is not to be used as a backdoor to cost shifting not otherwise permitted under the FTT Rules.
  • The leading authority on the circumstances in which costs are payable pursuant to rule 10(1)(b) FTT rules in the Tax Chamber is to be found in the Court of Appeal judgment in Distinctive Care v HMRC [2019] EWCA Civ 1010.

The Court endorsed the approach adopted in MORI.

It also endorsed, at least in the limited circumstances in which it was relevant, the analysis of the president of the Upper Tribunal Asylum and Immigration Chamber, sitting as a FTT judge in Cancino v Secretary of State for the Home Dept; Cancino (Costs – First-tier Tribunal – new powers) [2015] UKFTT 59 (IAC) (Cancino).

On the basis of this endorsement, and the standing of the panel considering the costs application in Cancino, this Tribunal considers the views adopted in that case are highly relevant and persuasive on the approach to be adopted. They also largely apply the binding authority of Ridehalgh v Horsefield [1994] Ch 205 (Ridehalgh) to the Tribunal.

In Cancino the Tribunal reinforced the discretionary nature of a wasted or unreasonable costs order identified in paragraph [33] above.

The Tribunal considered in some detail provisions similar to rule 10 FTT Rules which, as set out above, provides for a discretion to make an award of costs where costs have been wasted and/or where conduct is unreasonable. By reference to the Court of Appeal judgment in Ridehalgh the Tribunal (at paragraph [16]) identified the mischief intended to be addressed by the wasted costs rules as:

“the causing of loss and expense to litigants by the unjustifiable conduct of litigation by their or the other side’s lawyers. Where such conduct is shown, Parliament clearly intended to arm the Courts with an effective remedy for the protection of those injured.”

  • Wasted costs were identified in Ridehalgh (at page 232d-h, quoted in Cancino paragraph [16]) as payable where there was improper, unreasonable or negligent conduct which were defines as follows:

“Improper means what it has been understood to mean in this context for at least half a century. The adjective covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or other serious professional penalty. It covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. But it is not in our judgement limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can be fairly stigmatised as such whether or not it violates the letter of a professional code. …

Unreasonable also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner’s judgment, but it is not unreasonable. …

We are clear that negligent should be understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession. …We would however wish firmly to discountenance any suggestion that an applicant for a wasted costs order under this head need prove anything less than he would have to prove in an action for negligence.”

  • As noted in Cancino, the Court in Ridehalgh went on to apply the decision of the House of Lords in Saif Ali v Sidney Mitchell [1980] AC 198, in this context “negligent” conduct arises where a solicitor (or representative) in respect of “advice, acts or omissions in the course of their professional work which no member of the profession who was reasonably well informed and competent would have given or done or omitted to do.”
  • Ridehalgh also recognised that a “Court’s satisfaction that a legal representative has acted improperly, unreasonably or negligently and that such conduct has caused the other side to incur an identified sum of wasted costs, is not bound to make an order, but in that situation it would of course have to give sustainable reasons for exercising its discretion against making an order.” (Ridehalgh page 239e quoted paragraph 18 of Cancino).
  • The Tribunal also endorsed the application of a three-stage test when exercising the discretion to award wasted costs as set out in Ridehalgh:

(1) Has the legal representative of whom complaint is made acted improperly, unreasonably or negligently?

(2) If so, did such conduct cause the applicant to incur unnecessary costs?

(3) If so, is it, in all the circumstances of the case, just to order the legal representative to compensate the applicant for the whole or any part of the relevant costs?

  • In the context of a wasted costs order it was also noted (again applying Ridehalgh at page 234):

“A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he acts for a party who pursues a claim or a defence which is plainly doomed to fail”.

  • In the context of wasted costs (which are awarded against the legal representative of a party rather than the party who they represent) the rationale for this conclusion is that legal representatives may advise their clients of the weakness of a position but may nevertheless be instructed to run the case.
  • Having undertaken a thorough exposé of the history, rationale and theoretical application of the equivalent to rule 10(1)(a) FTT Rules, the Tribunal went on to consider the equivalent provision to 10(1)(b). At paragraph [23] it states (as it would apply to rule 10 FTT Rules):

“… [10(1)(b)] is concerned only with one species of unacceptable conduct, namely that which is unreasonable. We consider that the question of whether conduct is unreasonable under this limb of rule [10] is to be determined precisely in accordance with the principles which relate to unreasonable conduct under rule [10(1)(a)]. We find nothing in the 2007 Act or the rule itself to suggest otherwise. Thus the basic test will be whether there is a reasonable explanation for the conduct under scrutiny. …”

  • On the question of the threshold, again by reference to Ridehalgh, the Tribunal stated that the cost shifting rule was to be used in only the clearest of cases and should not be invoked without good reason (see paragraph [27]).
  • Finally, when considering the reasonableness of a party’s conduct, the Tribunal considered that the conduct of a litigant in person cannot be evaluated by reference to the standard of qualified lawyers, but neither may that be permitted to operate as a carte blanche to misuse the process of the Tribunal.
  • In that context the Tribunal also has in mind the considerations of the Supreme Court in BPP Holdings International Ltd and others v HMRC [2017] UKSC 55. In the context of a debarring decision issued against HMRC, Counsel for HMRC invited the Supreme Court to take account of the fact that the debarring order prevented HMRC from discharging its public duty and could lead to the public interest being harmed. Lord Neuberger (with whom the other justices agreed) considered that to so hold would set a dangerous precedent and would discourage public bodies from living up to the standards expected of individuals and private bodies. He considered that there was “at least as strong an argument for saying that the courts should expect higher standards from public bodies than from private bodies or individuals”. However, he went on to determine that all courts and tribunals should hold all parties to the same standard.
  • BPP is the later of these authorities and the Tribunal considers, in the context of a jurisdiction in which parties more commonly represent themselves and/or are not legally represented (including where HMRC conduct litigation through non-legally qualified litigators), the standard to be applied for a wasted costs order, personal to the representative, is that of reasonable competence by reference to their skills and experience.
  • By reference to the analysis provided in Ridehalgh and considered as applicable to the Tribunal costs regime in Cancino, the Tribunal distils the test to be applied in determining whether an unreasonable costs order should be made as follows:

(1) Where a case is allocated to the standard category the cost shifting regime provided under rule 10(1)(a) and (b) should be applied only where the conduct of the party (in the case of an unreasonable costs order) and the representative (in the case of a wasted costs order) should, on the facts, be reserved for the clearest of cases and only where there is good reason to make an award of costs justifying cost shifting.

(2) The circumstances in which an award of costs is to be made under rule 10(1)(b) is unreasonable conduct. Whilst it should readily be concluded that improper conduct (within the description provided in Ridehalgh) would naturally fall within unreasonable conduct (as improper conduct is likely to also to be considered vexatious) the same is not true for negligent conduct (in an “untechnical” way). The inclusion of negligence within a waste costs order can be reconciled with the fact that a wasted costs order imposes a costs penalty on a representative and not on the party appointing the representative.

(3) The acid test for unreasonable conduct is whether the conduct permits of a reasonable explanation.

(4) There is a three-stage approach to exercising the Tribunal’s discretion when awarding unreasonable costs as identified in paragraph [43] above. It is the overriding objective of acting justly and fairly in all the circumstances which underpins that three-stage approach.

See: GC FIELD & SON LTD & Ors v Revenue & Customs (COSTS – application for unreasonable costs – whether failure by HMRC to adduce evidence) [2022] UKFTT 314 (TC) (01 September 2022) (

Deaccessioning Powers of Museum Trustees, Duties, Variation, Applications, and Procedure.

This week I started the module about ‘Museums’ on the Institute of Art & Law ‘Diploma in Art Law’ course. Where a museum is found to have disposed of an object from its collection by sale, exchange, donation or transfer by any means to any person (‘Deaccession’) in consequence of financial and economic pressures and inadequate capital and revenue funding, it may be censured by Arts Council England and stripped of its accreditation. That in turn, renders the institution ineligible for various sources of public grant and a low priority for other public schemes. Whether a non-statutory museum which is a charity has the power to deaccession is governed first by its constitution, which may or may not provide an express power. In the absence of a power, the necessary power may be obtained. However, any such power:
(i) can only be exercised in furtherance of the objects of the charity; and
(ii) in exercising the power, the trustees must perform their duties (including fiduciary duties requiring them to obtain the best ‘price’).
In addition to the module, I am also writing an essay for the course entitled, ‘Deaccessioning Powers of Museum Trustees, Duties, Powers, Variation, Applications, and Procedure.’ See the ‘Mediation of Art & Cultural Heritage Disputes’ page at This will provide a current restatement of the Law on Museum Deaccessioning.

The energy industry is moving into a credit crunch

‘What is a “Lehman moment”? Generally speaking it’s the point at which one company’s disaster becomes everyone else’s problem, as happened in September 2008 when the losses Lehman Brothers had made by betting on America’s subprime mortgage market became insupportable, the investment bank filed for the biggest bankruptcy in corporate history, and panic spread like a disease through the global financial system.’

See: The energy industry is moving into a credit crunch | LinkedIn

Case preparation for a Tax Appeal

In order to argue an interpretation of Tax Law, the advocate must:
1st analyse the burden of proof, i.e. what the taxpayer [‘TP’]  has to prove as a matter of law regarding the relevant tax treatment by reference to:
·       the statutory framework and provisions applicable to the dispute; and
·       case law.
2nd determine the specific questions of fact,  i.e.
·       what the TP has done to fall within the ambit of the specific tax treatment asserted; or
·       whether there is a different tax treatment, because as a matter of fact, the TP did something else.
This requires detailed investigation and the drafting of a chronology of events.
3rd consider the following ‘cannons of construction’:
·       It is ‘preferable to begin with the interpretation of the legislation, and the fundamental question whether it can be given a purposive interpretation going beyond its literal terms: that is to say, whether a Ramsay approach is possible at all, and if so, the purposive construction on which it is to be based. … The question next arises how, on its proper interpretation, the legislation is to be applied to the facts.’ (UBS AG v. Revenue and Customs Comrs [2016]).
·       Where a statute contains no explanation of the purpose of the provision on which a purposive interpretation might be based, the judge may consider the historical background to and development of the legislation by reference to budget notes, explanatory notes and case law.
·       ‘… The driving principle in the Ramsay line of cases continues to involve a general rule of statutory construction and an unblinkered approach to the analysis of the facts. The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.’ (Collector of Stamp Revenue v. Arrowhead Assets Ltd [2003]).
·       When interpreting a statute, a court may adopt a strained interpretation instead of one that would be contrary to the clear intention of Parliament (Luke v. Inland Revenue Commissioners [2019]). The intention of Parliament must be clearly found on the wording of the legislation (Hancock v Revenue and Customs Comrs [2019]. An inconsistency is not sufficient. There must be a clear contradiction.
·       The headings in the statute are aids to construction (Stephens v Cuckfield Rural District Council [1960]).
·       The Explanatory Notes to an Act of Parliament may also be relevant to interpreting specific statutory provisions (R (otao Westminster City Council) v. National Asylum Support Service [2002] & Christianuyi v. Revenue and Customs Comrs [2018]).
·       For reference to be made to Hansard, there needs to be an ambiguity, obscurity or absurdity in the statutory interpretation that justifies such resort (Pepper v. Hart [1992]).

Challenging the validity of an offshore trust as being an illusory trust

As I explain in paragraph 7.9 of my book the ‘Contentious Trusts Handbook’ published by the Law Society in July 2020, ‘An illusory trust is not a valid trust. It is a pretense. Whereas a sham is concerned with the parties subjective intentions, whether a trust is illusory turns entirely upon construction of the terms of the trust. Where in substance, what is created is not a discretionary trust, but rather a form of trust analogous either to a:

  •  bare trust: or
  •  fixed interest trust,

under which the settlor is to be regarded as the 100% beneficial owner of the trust fund, then the court may conclude that the trust is illusory. A trust will also be illusory if the trustees owe no enforceable duties to the beneficiaries so as to eliminate the irreducible core of obligations fundamental to the trust concept. The only trust created will be a bare or resulting trust in favour of the settlor.

As part of my summer Tax litigation update reading, which involved reading: the 10th edition of ‘Tiley’s Revenue Law’, the 5th edition of Keith Gordon’s book, ‘Tax Appeals – Law and Practice at the FTT’; and the 2nd edition of Tolley’s ‘A Practical Guide to Tax Disputes’ by Adam Craggs, Julian Hickey & Jonathan Levy , I am now on page 552 of ‘Tolley’s Estate Planning 2021-2022’ by gurus Sharon & Simon McKie, which contains the following commentary about illusory trusts:

‘Another, and in some ways novel, approach to challenging a disposition into trust which fell short of a finding of sham was successfully pursued in the case of JSC Mezhdunarodniy Promshlenniy Bank v. Pugachev [2017] … The settlor, who was also the protector and a discretionary beneficiary, had reserved a substantial number of powers. It was a combination of these factors (and the particular facts of the case) which led the court to conclude inter-alia there was no real intention to create a trust and that the settlor had never intended to part with control of the assets, i.e. that the trusts were illusory. In Webb v Webb [2020], the Privy Council, on appeal from the Court of Appeal of the Cook Islands, found in Pugachev-esque fashion that, “the Court of Appeal is plainly entitled to find as it did the trustees failed to record an effective alienation by Mr Webb of any of the trust property. The bundle of rights which he retained is indistinguishable from ownership.”’ See also my earlier blog, ‘The offshore trust that never was!