InCoal Staff Superannuation Scheme Trustees v HMRC[2017] UKUT 137, the UT refused to make a reference to the CJEU despite the imminence of Brexit.
The substantive issue was whether HMRC’s refusal to repay foreign withholding tax suffered on overseas manufactured dividends (MODs), which were exempt from UK tax, amounted to a restriction on the free movement of capital, in the absence of any possibility of set off.
The trustees applied to the UT for a reference to the CJEU, following the dismissal of their appeal by the FTT. They argued that the sole issue that arose in the appeal related to the compatibility of the relevant domestic law with the requirements of EU law. They accepted that it would be unusual for the UT to make a reference to the CJEU without first hearing the appeal but they contended (referring to Brexit) that we live ‘in unusual times’.
The UT agreed that the appeal raised issues of EU law which were not acte clair and that the government did intend to bring the jurisdiction of the CJEU in the UK to an end. However, the UT also pointed out that the transitional Brexit provisions were not known; they would need to apply to those in the course of litigation relating to directly applicable EU law at the time of exit.
The UT added that there was no reason to make the sought reference before the hearing. It noted, inter alia, that this would only be justified if the tribunal felt that it would not be able to resolve the issues with complete confidence. Furthermore, as the case had a historical interest only (since the MOD regime had been abolished), it was unlikely to have repercussions beyond its own facts.
Why it matters: The UT said: ‘The trustees’ submissions in this application invite me to assume that the arrangements that the government will make for resolving disputes about the interpretation and application of EU law that are pending at the date of UK’s exit will be so unsatisfactory that the tribunal should change its usual practice and accelerate the making of references to prevent that situation arising wherever possible. I am not prepared to make that assumption.’
InCoal Staff Superannuation Scheme Trustees v HMRC[2017] UKUT 137, the UT refused to make a reference to the CJEU despite the imminence of Brexit.
The substantive issue was whether HMRC’s refusal to repay foreign withholding tax suffered on overseas manufactured dividends (MODs), which were exempt from UK tax, amounted to a restriction on the free movement of capital, in the absence of any possibility of set off.
The trustees applied to the UT for a reference to the CJEU, following the dismissal of their appeal by the FTT. They argued that the sole issue that arose in the appeal related to the compatibility of the relevant domestic law with the requirements of EU law. They accepted that it would be unusual for the UT to make a reference to the CJEU without first hearing the appeal but they contended (referring to Brexit) that we live ‘in unusual times’.
The UT agreed that the appeal raised issues of EU law which were not acte clair and that the government did intend to bring the jurisdiction of the CJEU in the UK to an end. However, the UT also pointed out that the transitional Brexit provisions were not known; they would need to apply to those in the course of litigation relating to directly applicable EU law at the time of exit.
The UT added that there was no reason to make the sought reference before the hearing. It noted, inter alia, that this would only be justified if the tribunal felt that it would not be able to resolve the issues with complete confidence. Furthermore, as the case had a historical interest only (since the MOD regime had been abolished), it was unlikely to have repercussions beyond its own facts.
Why it matters: The UT said: ‘The trustees’ submissions in this application invite me to assume that the arrangements that the government will make for resolving disputes about the interpretation and application of EU law that are pending at the date of UK’s exit will be so unsatisfactory that the tribunal should change its usual practice and accelerate the making of references to prevent that situation arising wherever possible. I am not prepared to make that assumption.’
