- Wide rather than narrow interpretation

 

"[40] In addition to these authorities, the Tribunal raised the older authorities which suggested (long before purposive interpretation had become the norm) that anti-avoidance provisions should be given a wide interpretation. In Greenberg v CIR, [1979] AC 109, Lord Reid said (at p137e):

"We seem to have travelled a long way from the general and salutary rule that the subject is not to be taxed except by plain words. But I must recognise that plain words are seldom adequate to anticipate and forestall the multiplicity of ingenious schemes which are constantly being devised to evade taxation. Parliament is very properly determined to prevent this kind of tax evasion and, if the courts find it impossible to give very wide meanings to general phrases, the only alternative may be for Parliament to do as some other countries have done, and introduce legislation of a more sweeping character which will put the ordinary well-intentioned person at much greater risk than is created by a wide interpretation of such provisions as those which we are now considering."
[41] Perhaps presciently, he later commented (at p138e):

"I sometimes suspect that our normal meticulous methods of statutory construction tend to lead us astray by concentrating too much on verbal niceties and paying too little attention to the provisions read as a whole."
[42] Lord Wilberforce elaborated on this approach in IRC v Joiner, [1975] 1 WLR 1701 at p1705g:

"On the enactment of the original s 28 of the Finance Act 1960 it was possible to contend, and it was contended, that this section (and its associated sections) was directed against a particular type of tax avoidance known generally under such descriptions as dividend-stripping, asset-stripping and bond-washing, and that the sections and particular expressions used in them, amongst others 'transactions in securities', should be interpreted in the light of this supposed purpose. But this line of argument became unmaintainable after the decisions of this House in Inland Revenue Comrs v Parker' and Greenberg v Inland Revenue Comrs. It is clear that all the members of this House who decided those cases were of opinion that a wide interpretation must be given to the sections and to the expressions used in them. More than this, it appeared from the opinion of Lord Reid in Greenberg v Inland Revenue Comrs that the sections called for a different method of interpretation from that traditionally used in taxing Acts. For whereas it is generally the rule that clear words are required to impose a tax, so that the taxpayer has the benefit of doubts or ambiguities, Lord Reid made it clear that the scheme of the sections, introducing as they did a wide and general attack on tax avoidance, required that expressions which might otherwise have been cut down in the interest of precision were to be given the wide meaning evidently intended, even though they led to a conclusion short of which judges would normally desire to stop."
[43] More recent cases appear to recognise the continued validity of this approach to the interpretation of anti-avoidance provisions as a free-standing principle, notwithstanding the more general ascendancy of purposive interpretation, which might be thought to have subsumed that approach or otherwise rendered it otiose; see the comments of Lord Doherty in the Inner House of the Court of Session in Moulsdale v HMRC, [2021] CSIH 29 at [54], where he referred to a comment of Lord Hoffmann in Newnham College Cambridge v HMRC, [2008] UKHL 23 at [15] (although Lord Hoffmann seems simply to be reciting an HMRC submission to this effect without commenting on it one way or another), and the comments of the Upper Tribunal in HMRC v Sehgal, [2024] UKUT 74 (TCC) at [60]." (Blackfriars Hotel (UK) Holdings Limited v. HMRC [2024] UKFTT 1095 (TC), Judge Blackwell)

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