One minute with Francis Fitzpatrick QC, barrister at 11 New Square, Lincoln’s Inn, London.
What’s keeping you busy at work?
Lots of litigation for taxpayers and HMRC, lots of international tax work, anti-hybrids, BEPS, cryptoassets, double tax treaties, mixed in with real property financing, intangibles and private equity – never a dull moment!
If you could make one change to a tax law or practice, what would it be?
I do feel that the fundamental principle of the rule of law, which is central to democracy, is increasingly being undermined by overly broad legislation, which puts taxpayers in a position of great uncertainty in which they have to place reliance on administrative practice rather than the law itself. I would like to see much clearer and tighter drawn legislation, especially secondary legislation.
What do you know now that you wish you’d known at the start of your career?
How big the Yellow Books and Orange Books were going to be as the years passed - I would have allocated more shelf space!
Are there any new rules that are causing a particular problem?
I am concerned about the breadth of the disclosure requirements under the new uncertain tax treatment rules. It is surprising that the information the taxpayer has to disclose is determined by HMRC guidance rather than by the statute itself. These disclosure requirements may potentially clash with legal professional privilege, which is a key protection for taxpayers.
Has a recent tax case caught your eye?
A couple of cases have. First, not specifically tax cases, but a number of High Court decisions about the nature of cryptoassets are both interesting and important, namely AA v Persons Unknown [2020] 4 WLR and Fetch ai v Persons unknown[2021] EWHC 2254. Whilst the reasoning differs, both cases conclude that cryptoassets are property for the purposes of English law and show the flexibility of the common law in adapting to new technology. Subject to any appeals, these would seem to definitively establish that cryptoassets are assets for chargeable gains purposes.
Second, the Italian Supreme Court, in its Decision No. 3380 on beneficial ownership in domestic legislation implementing the interest and royalty directive, offers an example of when the anti-abuse rule derived from the Danish conduit cases may not apply, which seems to pay more regard to legal form than to radical substance arguments.
What should we be looking out for later this year?
Further developments in international tax law as the BEPs project continues to roll out and decisions from other jurisdictions begin to emerge.
And finally, you might not know this about me but...
My favourite book is The Master and Margarita by Mikhail Bulgakov, in which the devil comes to town in the form of the magician Wotan, accompanied by a gun toting cat, to organise a huge ball and to expose hypocrisy and corruption. Aspects of it are closely modelled on Bulgakov’s own life. This book, his greatest work, was not published until long after his death, thereby proving the most famous phrase in the book, ‘manuscripts don’t burn’.
One minute with Francis Fitzpatrick QC, barrister at 11 New Square, Lincoln’s Inn, London.
What’s keeping you busy at work?
Lots of litigation for taxpayers and HMRC, lots of international tax work, anti-hybrids, BEPS, cryptoassets, double tax treaties, mixed in with real property financing, intangibles and private equity – never a dull moment!
If you could make one change to a tax law or practice, what would it be?
I do feel that the fundamental principle of the rule of law, which is central to democracy, is increasingly being undermined by overly broad legislation, which puts taxpayers in a position of great uncertainty in which they have to place reliance on administrative practice rather than the law itself. I would like to see much clearer and tighter drawn legislation, especially secondary legislation.
What do you know now that you wish you’d known at the start of your career?
How big the Yellow Books and Orange Books were going to be as the years passed - I would have allocated more shelf space!
Are there any new rules that are causing a particular problem?
I am concerned about the breadth of the disclosure requirements under the new uncertain tax treatment rules. It is surprising that the information the taxpayer has to disclose is determined by HMRC guidance rather than by the statute itself. These disclosure requirements may potentially clash with legal professional privilege, which is a key protection for taxpayers.
Has a recent tax case caught your eye?
A couple of cases have. First, not specifically tax cases, but a number of High Court decisions about the nature of cryptoassets are both interesting and important, namely AA v Persons Unknown [2020] 4 WLR and Fetch ai v Persons unknown[2021] EWHC 2254. Whilst the reasoning differs, both cases conclude that cryptoassets are property for the purposes of English law and show the flexibility of the common law in adapting to new technology. Subject to any appeals, these would seem to definitively establish that cryptoassets are assets for chargeable gains purposes.
Second, the Italian Supreme Court, in its Decision No. 3380 on beneficial ownership in domestic legislation implementing the interest and royalty directive, offers an example of when the anti-abuse rule derived from the Danish conduit cases may not apply, which seems to pay more regard to legal form than to radical substance arguments.
What should we be looking out for later this year?
Further developments in international tax law as the BEPs project continues to roll out and decisions from other jurisdictions begin to emerge.
And finally, you might not know this about me but...
My favourite book is The Master and Margarita by Mikhail Bulgakov, in which the devil comes to town in the form of the magician Wotan, accompanied by a gun toting cat, to organise a huge ball and to expose hypocrisy and corruption. Aspects of it are closely modelled on Bulgakov’s own life. This book, his greatest work, was not published until long after his death, thereby proving the most famous phrase in the book, ‘manuscripts don’t burn’.
