© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Same day​​
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- Nonsensical gap in the period looked at by an anti-avoidance provision would be absurd
"[60] In short, the FTT and UT were correct to conclude that the proviso does not contain a loophole that permits transactions earlier on the same day of the distribution to escape its application, a result which would be absurd.
[61] The difficulty with the drafting is that the term "effective date" is defined in s.119 FA 2003 as a particular date, generally the date of completion. It is a concept used throughout the legislation – Ms Shaw told us that it was used almost 200 times – with no indication of any scope to treat it as referring to a particular time on a day. Accordingly, read literally, s.54(4)(b) appears to refer to a three year period ending on the day immediately before completion, in this case 4 July rather than 5 July 2011. But that would leave a nonsensical gap between midnight on that date and the completion of the relevant transaction on the following day.
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[70] Similarly, in this case Parliament cannot have intended the operation of the proviso to be avoided by the simple expedient of ensuring that the transaction qualifying for group relief was entered into after, rather than before, midnight on the effective date." (The Tower One St George Wharf Limited v. HMRC [2025] EWCA Civ 1588, Falk LJ)
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