© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
E2. Internal aides
Headings may be taken into account​
"[42]...The heading of the section, “Anti-avoidance”, is the only indication in the section which could support PBL’s contention. The heading is relevant to assist an understanding as to the mischief which the provision addresses, but it says nothing as to the motives of the parties to the scheme transactions. There is nothing in the body of the section which expressly or inferentially refers to motivation. The provision was enacted to counter tax avoidance which resulted from the use of a number of transactions to effect the disposal and acquisition of a chargeable interest. It is sufficient for the operation of the section that tax avoidance, in the sense of a reduced liability or no liability to SDLT, resulted from the series of transactions which the parties put in place, whatever their motive for transacting in that manner. This is clear from subsection (1)(c) which compares the amount of SDLT payable in respect of the actual transactions against what would be payable under the notional land transaction in section 75A(4), by which P acquired V’s chargeable interest on its disposal by V." (Project Blue Limited v. HMRC [2018] UKSC 30)
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"[78] We also take into account the heading of paragraph 7A which refers to “qualifying amounts of relevant motoring expenditure”. It is not necessary that there should be any ambiguity in a provision before reliance can be placed on a heading. The significance of headings was recently described by Whipple LJ in HM Revenue & Customs v Naghshineh [2022] EWCA Civ 19:
[41] On the issue of statutory construction, we were taken to Bennion, Bailey and Norbury on Statutory Interpretation (8th edn) which suggests that a heading is part of an Act and may be considered in construing an Act, provided that due account is taken of the fact that its function is merely to serve as a brief guide to the material to which it relates and that it may not be entirely accurate (see para 16.7). The parties both accepted that general proposition, as do I.
[79] In our view, it is significant that the heading treats QA as a part of RME. Mr Maugham accepted that on his case the heading contains a mistake. We do not accept that it does contain a mistake. Mr Mullan suggested that the heading was included because QA would be expected to be part of RME, but there was no condition to that effect. We do not accept that submission." (Laing O'Rourke Services Limited v. HMRC [2023] UKUT 155 (TCC), Green J and Judge Cannan)
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"[64] As stated above, the heading is "Effect of transfer of trading assets within a group". Our view is that the heading accurately captures the purpose of the provision. The significance of headings was recently described in HM Revenue & Customs v Naghshineh [2022] EWCA Civ 19:
" [41] On the issue of statutory construction, we were taken to Bennion, Bailey and Norbury on Statutory Interpretation (8th edn) which suggests that a heading is part of an Act and may be considered in construing an Act, provided that due account is taken of the fact that its function is merely to serve as a brief guide to the material to which it relates and that it may not be entirely accurate (see para 16.7). The parties both accepted that general proposition, as do I."" (M Group Holdings Limited v. HMRC [2023] UKUT 213 (TCC), Green J and Judge Ramshaw)​
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- But do not read too much into heading
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"[67] While a heading in a statute may assist an understanding as to the mischief which the provision aims to address, we should be wary of reading too much into a heading: see the comments of Lord Hodge in Project Blue Ltd v HMRC [2018] UKSC 30, §42. We therefore agree with Ms Wilson that it is going too far to use the heading of paragraph 8, on its own, to justify an interpretation of "met" as meaning met by way of a subsidy." (HMRC v. Perenco UK Limited [2023] UKUT 169 (TCC), Bacon J and Judge Baldwin)
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- Description as consequential amendment not limiting scope
"[50] Mr Green submitted that on the Inland Revenue's argument Parliament did in 1995 make a fundamental change in section 77, and that it is remarkable to see it described as a consequential amendment. I see some force in that. But it is possible that the in-depth review which must have preceded the 1995 Act led to this point being identified as one on which a significant change in the CGT legislation was expedient. In any event the use of the label "consequential amendments", even if rather inappropriate, cannot alter the construction of the amended section 77. With all respect to the Court of Appeal I consider that the construction which they adopted is clearly wrong. I would allow the appeal, set aside the order of the Court of Appeal, and restore the order of Peter Smith J. But (in accordance with the terms on which leave to appeal was granted) the appellants must pay the respondents' costs in this House. I would order the respondents to pay the costs in the Court of Appeal." (West v. Trennery [2005] UKHL 5, Lord Walker)
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Side notes/marginal notes
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- Admissible in principle
“The side notes to sections of an Act of Parliament are, in principle, admissible as an aid to interpretation of those sections but the significance to be attached to the side notes and the effect on the interpretation of the sections will vary greatly from one case to another. In the present case, the reference to anti-avoidance in the side notes is readily explained by the fact that section 75A itself spells out what is meant by a case of “avoidance”. I consider that section 75A explains that a case which comes within section 75A(1)(c) is a case of “avoidance” and the sections are to operate to counter that avoidance. It is therefore neither necessary nor appropriate to read more into the side notes and to hold that the side notes are to be taken to refer to an unstated requirement that there be a purpose of tax avoidance.” (Project Blue Limited v. HMRC [2014] UKUT 564 (TCC), §54, Morgan J).
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“Whilst a marginal note to a section cannot control the language used in the section, it is at least permissible to approach a consideration of the section's general purpose and the mischief at which it is aimed with the note in mind.” (Farnborough Airport Properties Company Ltd v. HMRC [2016] UKFTT 431 (TC), §37 quoting Stephens v Cuckfield RDC [1960] 2 QB 373 at 383, Upjohn LJ)
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- But may be illustrative only
“I do not consider the marginal notes of assistance in the interpretative exercise. The difficulty which the appellants face, and in my view do not succeed in overcoming, is that these notes are all, by the use of the concluding 'etc', obviously intended to be illustrative at best.” (Farnborough Airport Properties Company Ltd v. HMRC [2016] UKFTT 431 (TC), §42)
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Transitional and saving provisions​
"[40] The point is made even more clearly by the transitional provisions in sub-section 103(6). It provides that the section does not apply to anything which would fall within sub-section (1) done by HMRC, if before 11 March 2020, a court or tribunal determined that the relevant act was of no effect because it was not done by an officer or an officer of a particular kind and at that date the order of the court or tribunal had not been set aside or overturned on appeal. In other words, if before 11 March 2020, a taxpayer has been successful in proving that a particular act was invalid because HMRC had not proved that it was done by an officer or an officer of the necessary kind, that judgment will not be undermined or reversed by section 103. The inclusion of this saving provision is consistent with the wider interpretation of the section as a whole. It would be unnecessary if proof of the involvement of an officer were still required. To put the matter another way, the need for the saving provision is consistent with the section having rendered proof of involvement of an officer no longer necessary because anything capable of being done by an officer may be done by HMRC both prospectively and retrospectively." (Marano v. HMRC [2024] EWCA Civ 876, Asplin, Coulson, Nugee LJJJ)
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