Do HMRC’s allegations of fraud against GE signal a new era in tax investigations?

What is the case about?

The High Court decision in HMRC v IGE USA Investments Ltd & others [2020] EWHC 2121 (Ch) is fundamentally about whether HMRC should be allowed to rescind a settlement agreement reached with General Electric (GE) in 2005 which included agreement as to the tax treatment of particular transactions. HMRC is arguing that it is not bound by the settlement agreement including because the taxpayer made fraudulent representations in the course of discussions leading up to the settlement. It is obviously highly unusual to see such a serious accusation levelled at a multinational professionally-advised taxpayer such as GE. However the numbers are large (apparently around US$1bn of tax is at stake) and the transactions go back to 2004 so – unless...