UK: Exit tax must conform with EU freedom of establishment principle (Upper Tribunal decision)

The Upper Tribunal issued a decision in a case regarding tax charges on trustees and a company ceasing UK residency. 

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November 19, 2024

The Upper Tribunal issued a decision in a case regarding tax charges on trustees and a company ceasing UK residency. The court found that while the exit tax itself did not infringe the EU principle of freedom of establishment, the inability to defer payments raised concerns.

The tribunal allowed for a conforming interpretation of UK tax legislation, permitting deferred payment of exit taxes in five annual installments. The appeals from the taxpayers were dismissed, and the decision may be appealed to the Court of Appeal.

The case is: The Trustees Of The Panico Panayi Accumulation And Maintenance Settlements Numbers 1 To 4 and Redevco Properties UK1 Limited v. The Commissioners For His Majesty's Revenue And Customs [2024] UKUT 00319 (TCC). Read the decision

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