“35. …a general rule of statutory construction and an unblinkered approach to the analysis of the facts. The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.”
“Where schemes involve intermediate transactions having no commercial purpose inserted for the sole purpose of tax avoidance, it is quite likely that a purposive interpretation of the statute will result in such steps being disregarded for fiscal purposes. But not always.”
“258. Viewing the transaction as it was intended to operate as a composite whole, at the end of the three or four week period during which the Leases were in place, the appellants ended up in exactly the same position as they had started in, as the legal and beneficial owners of the assets having had the use of the assets in their trades throughout. The appellants gave up ownership of the assets (subject to the leaseback) with the attendant legal and commercial effects that entailed but they only did so to generate the desired allowances and, it appears, for the bare minimum of time considered necessary to achieve that result. In economic terms they had incurred no material costs other than the fees due to [the Bank] and other expenses associated with implementing the transactions.”
“5. The depreciation in value of plant and machinery and other capital items does not give rise to a deductible expense for tax purposes. CAA 2001 seeks to reduce the impact of this rule by providing for capital allowances to be given, by way of a deduction against taxable profits, in respect of expenditure on, among other things, plant and machinery used for the purposes of a “qualifying activity”, which includes a trade. Allowances are generally given on a “pooled” basis, so a taxpayer incurring expenditure to acquire plant and machinery increases the pool of expenditure qualifying for allowances. Allowances are made as a percentage of the balance available in the pool, the pool being reduced by the amount of the allowances given (known as the reducing balance basis). A taxpayer selling plant and machinery that has qualified for allowances in any accounting period is required to bring the sale proceeds into account as a “disposal value”
“10. … Very broadly, at times material to these appeals and before further legislative changes were made inFinance Act 2011 , the legislation determined that, for leases such as those relevant in these appeals, allowances would be available by reference to the present value of the “minimum lease payments”, defined in s70YE(1) of CAA 2001 as: “the minimum payments under the lease over the term of the lease (including any initial payment) together with – (a) in the case of the lessee, so much of any residual amount as is guaranteed by him or a person connected with him…”
“39. … (1) The suggestion was that (a) assets would be sold to a bank at market value (b) the bank would lease them back to the asset user for four weeks at weekly rentals, (c) “to eliminate asset risk” for the bank, the user would provide a guarantee as to the minimum value of the assets at the end of the lease term in the form of a Put Option, (d) the bank would provide a Call Option to a group company, and (e) it was expected that the bank would exercise its Put Option. (2) It was stated that (a) the sale and finance leaseback should be tax neutral for the asset user being both an allowances disposal event and a re-acquisition for the same amount, (b) although the termination of the leaseback would be a disposal event, the terms of the Put Option should result in a nil value, and (c) the payment to acquire the assets under the Put Option should constitute new capital expenditure for the user and result in incremental capital allowances equivalent to the expected market value of the assets at the end of the lease term. (3) It was stated that the user and the bank would account for the transaction as a finance lease or loan in their respective accounts and the assets would remain on the user’s balance sheet throughout. (4) It was stated that for a transaction size of£23 million the tax savings should be around£6.4 million part of which would be a reduction in current tax and part a credit through deferred tax which would be realised as tax relief in future periods.”
“15. On the appellants’ view, therefore, looking at each step up to and including the expiry of the Leases, the appellants’ allowances position in respect of the assets remained, in effect, precisely as it had been before the transactions were implemented. However, these steps put the appellants in the position whereby they could claim that, when they re-acquired the assets on SGLJ exercising the Put Options, for the purposes of s 11 they incurred new qualifying expenditure on the assets in the form of the Option Price. On their analysis, they incurred that sum on the assets for the purposes of their respective trades and owned the assets as a result of incurring it (having “ceased to own” the assets on the initial disposal of the assets to SGLJ). 16. The overall result, therefore, so the appellants assert, is that they added qualifying expenditure of£95 to the existing AQE [available qualifying expenditure] relating to the assets (of£80 ). In their view, that was the case notwithstanding that (a) they had suffered no real cost of£95 , given that the Option Price was funded by the sales proceeds received from SGLJ on the initial sale of the assets to it, and (b) they parted with ownership of the assets under a pre-set plan on a temporary basis only for the sole purpose of generating further allowances in this way.”
“The defendants in two separate cases were the registered owners of a number of unoccupied commercial properties on which non-domestic rates were payable by the “owner of the hereditament” withinsection 45(1)(b) of the Local Government Finance Act 1988 , defined insection 65(1) of the Act as “the person entitled to possession” of the hereditament. The defendants sought to avoid liability for such rates by leasing the hereditaments to special purpose vehicle companies (“SPVs”) without any assets or business, which were then voluntarily wound up, so as to trigger the winding-up exemption to non-domestic rates, or allowed to be struck off the register of companies as dormant companies and thus dissolved, so that the leases and liability for rates passed as bona vacantia to the Crown. The leases were not shams, so that as a matter of real property law they conferred an entitlement to possession upon the SPVs. The claimant local authorities brought claims seeking recovery of non-domestic rates from the defendants, contending that: (i) the 1988 Act should be given a purposive interpretation so that “owner” in section 45(1)(b) meant someone with a “real” entitlement to possession, which in the present cases would be the defendants; and (ii), alternatively, the court could pierce the corporate veil of the SPVs so that the defendants would be treated as the true owners of the hereditaments for the purposes of section 45(1)(b). The defendants applied to strike out the particulars of claim on the basis that they disclosed no reasonable grounds for bringing the claims. The judge allowed the applications in part, striking out those parts of the particulars of claim which related to a purposive interpretation of the Act, but not those parts which related to piercing the corporate veil. The Court of Appeal dismissed the claimants’ appeals, allowed the defendants’ cross-appeals and struck out the claims, holding that the SPVs were the “owners” of the hereditaments for the purposes of section 45(1)(b) and that it was not open to the court to pierce the corporate veil of the SPVs.”
“11. The result of applying the purposive approach to fiscal legislation has often been to disregard transactions or elements of transactions which have no business purpose and have as their sole aim the avoidance of tax. This is not because of any principle that a transaction otherwise effective to achieve a tax advantage should be treated as ineffective to do so if it is undertaken for the purpose of tax avoidance. It is because it is not generally to be expected that Parliament intends to exempt from tax a transaction which has no purpose other than tax avoidance. As Judge Learned Hand said in Gilbert v Comr of Internal Revenue (1957) 248 F 2d 399, 411, in a celebrated passage cited (in part) by Lord Wilberforce in Ramsay[1982] AC 300 , 326: “If…the taxpayer enters into a transaction that does not appreciably affect his beneficial interest except to reduce his tax, the law will disregard it; for we cannot suppose that it was part of the purpose of the Act to provide an escape from liabilities that it sought to impose.”
“to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall e›ect of a number of elements intended to operate together) answered to the statutory description.”
“the driving principle in the Ramsay line of cases continues to involve a general rule of statutory construction and an unblinkered approach to the analysis of the facts. The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.”” “If…the taxpayer enters into a transaction that does not appreciably affect his beneficial interest except to reduce his tax, the law will disregard it; for we cannot suppose that it was part of the purpose of the Act to provide an escape from liabilities that it sought to impose.” “to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall e›ect of a number of elements intended to operate together) answered to the statutory description.”
“15. In the task of ascertaining whether a particular statutory provision imposes a charge, or grants an exemption from a charge, the Ramsay approach is generally described - as it is in the statements quoted above - as involving two components or stages. The first is to ascertain the class of facts (which may or may not be transactions) intended to be affected by the charge or exemption. This is a process of interpretation of the statutory provision in the light of its purpose. The second is to discover whether the relevant facts fall within that class, in the sense that they “answer to the statutory description” (Barclays Mercantile at para 32). This may be described as a process of application of the statutory provision to the facts. It is useful to distinguish these processes, although there is no rigid demarcation between them and an iterative approach may be required. 16. Both interpretation and application share the need to avoid tunnel vision. The particular charging or exempting provision must be construed in the context of the whole statutory scheme within which it is contained. The identification of its purpose may require an even wider review, extending to the history of the statutory provision or scheme and its political or social objective, to the extent that this can reliably be ascertained from admissible material. 17. Likewise, the facts must be also be looked at in the round. In Inland Revenue Comrs v McGuckian[1997] 1WLR 991 , 999, Lord Steyn explained that it was the formalistic insistence on examining steps in a composite scheme separately that allowed tax avoidance schemes to flourish. Sometimes looking at a composite scheme as a whole allows particular steps which have no commercial purpose to be ignored. But the requirement to look at the facts in the round is not limited to such cases. Thus, in Scottish Provident[2004] 1WLR 3172 where the taxing statute granted an allowance which depended upon the taxpayer having an entitlement to a specified type of property (gilts), a view of the facts in the round enabled the House of Lords to conclude that a legal entitlement to gilts generated by one element in a larger scheme failed to qualify because the entitlement was intended and expected to be cancelled out by an equal and opposite transaction.”
“48. … As we have explained, the schemes were designed in such a way as to ensure that the SPV to whom a lease was granted had no real or practical control over whether the property was occupied or not and that such control remained at all times with the landlord. 49. In our view, Parliament cannot sensibly be taken to have intended that “the person entitled to possession” of an unoccupied property on whom the liability for rates is imposed should encompass a company which has no real or practical ability to exercise its legal right to possession and on which that legal right has been conferred for no purpose other than the avoidance of liability for rates. Still less can Parliament rationally be taken to have intended that an entitlement created with the aim of acting unlawfully and abusing procedures provided by company and insolvency law should fall within the statutory description. 50. In these circumstances we have no difficulty in concluding that, on the agreed and assumed facts, the SPVs to which leases were granted as part of either of the schemes we have described did not thereby become “entitled to possession” of the demised property for the purposes of the 1988 Act. Rather, throughout the term of the lease that person remained the defendant landlord. This does not involve ignoring the leases, in the way that an intermediate element in a circular transaction might be ignored under the Ramsay doctrine. Rather it involves their close examination in their context, and a conclusion that they did not transfer to the SPVs the entitlement to possession required by the Act as the badge of ownership. If the defendants did not thereby transfer their entitlement to possession it necessarily remained, for the purposes of the Act, with them. The Act requires someone to be identified as the owner. That will be the person who, in any tenurial chain, starting with the freeholder and working downwards, has not disposed of the entitlement to possession of the property in question. 51. We emphasise that this conclusion is not founded on the fact that the defendant’s only motive in granting the lease was to avoid paying business rates, although that was undoubtedly so. If the leases entered into by the defendants had the effect that they were not liable for business rates, their motive for granting the leases is irrelevant. Nor does it illuminate the legal issues to use words such as “artificial” or “contrived” to describe the leases, when it is now accepted that they created genuine legal rights and obligations and were not shams. Our conclusion is based squarely and solely on a purposive interpretation of the relevant statutory provisions and an analysis of the facts in the light of the provisions so construed.”
“61. … We would, however, reject the criticism that the test is insufficiently certain. In any ordinary case the test will easily be satisfied by identifying the person who is entitled to possession as a matter of the law of real property. The fact that the law of real property may not prove a reliable guide in an unusual case of the present kind is not in our view an objection to our preferred interpretation. The value of legal certainty does not extend to construing legislation in a way which will guarantee the effectiveness of transactions undertaken solely to avoid the liability which the legislation seeks to impose.”
“246. The overall purpose of s 61 is to trigger an adjustment to the taxpayer’s allowances position where any one of a number of specified disposal events occurs in relation to an asset in respect of which the taxpayer has claimed allowances. Given the entitlement to allowances is based on whether the taxpayer owns the relevant asset, not surprisingly one of the specified events is where a taxpayer “ceases to own” the asset under sub-s (1)(a). The other specified events fall into two broad categories (see [26] above): (1) Events where the asset ceases to be available to the taxpayer on a permanent basis or, at any rate, under a state of affairs which is expected to be on-going, such as (a) the loss of possession of the asset where it is reasonable to assume the loss is permanent, (b) where a person abandons an asset in certain circumstances or (c) where the asset ceases to exist. (2) Events where the asset may remain available to the taxpayer but a capital allowances adjustment is considered necessary under the general scheme of the allowances rules such as where (a) the asset begins to be used wholly or partly for purposes other than those of the qualifying activity or (b) the asset begins to be leased under a long funding lease, or (c) the qualifying activity is permanently discontinued.” (1) Events where the asset ceases to be available to the taxpayer on a permanent basis or, at any rate, under a state of affairs which is expected to be on-going, such as (a) the loss of possession of the asset where it is reasonable to assume the loss is permanent, (b) where a person abandons an asset in certain circumstances or (c) where the asset ceases to exist. (2) Events where the asset may remain available to the taxpayer but a capital allowances adjustment is considered necessary under the general scheme of the allowances rules such as where (a) the asset begins to be used wholly or partly for purposes other than those of the qualifying activity or (b) the asset begins to be leased under a long funding lease, or (c) the qualifying activity is permanently discontinued.”
“248. It can readily be seen, therefore, that, viewed in the context of the overall scheme of the allowances code, s 61(1)(a) is intended to operate, by reference to the key concept of ownership, as a coherent whole with s 11. Ownership of the asset is an essential feature of a taxpayer’s entitlement to allowances on capital expenditure incurred in respect of the asset (under s 11) and, correspondingly, the “cessation” of that ownership results in that entitlement ending and, in effect, a final reckoning of the allowances due during the period of ownership (under s 61(1)(a)). 249. The intended effect of s 61(1)(a) is that the taxpayer’s entitlement to allowances, as established under s 11 by reference to “real world” events, gives rise to allowances (a) only for the period during which the taxpayer owns the relevant asset, and (b) in a total sum corresponding to the asset’s actual depreciation during that period, as measured by the specified disposal value which, on the sale of assets, is a sum equal to the net sales proceeds received. Given the interrelationship between s 11 and s 61, it is a reasonable assumption that the disposal value, by reference to which an adjustment is to be made on a disposal occurring, must be no less “real” than the qualifying expenditure to which, in effect, the adjustment is made.”
“260. … (1) On the sale of the assets to SGLJ, the appellants did not dispose of the assets for a disposal value for the purposes of s 61: (a) Viewed in the light of the overall context in which that provision operates and in light of the other disposal events, it seems to me that the reference to a “cessation” of ownership in sub-s (1)(a) implies that, for that provision to operate, it is not sufficient for the taxpayer to give up or lose the bundle of rights and liabilities characteristic of ownership in legal terms if, as is the case here: (i) it does so in the certain knowledge that, barring a wholly unforeseen event, it will re-acquire ownership within a matter of weeks, and (ii) the temporary loss of ownership was effected as the first step in a composite scheme each element of which was carefully crafted to ensure that the scheme would operate to deliver additional “magical” qualifying expenditure for the taxpayer of£95 without it suffering an actual cost of that amount. In other words, there is no such cessation of ownership on a sale of assets which was effected to generate a loss of ownership, which it was known from the outset would be for a very short period only, as an essential ingredient in an artificial construct to manufacture “qualifying expenditure”. (b) Accordingly, the sales proceeds received by the appellants on the sale cannot be viewed as comprising a “real” disposal value which is required to be brought into account in a capital allowances adjustment. These sums were merely monies put into a loop for the appellants to use to generate supposed “qualifying expenditure” by paying the Option Price when the Put Options were exercised.” (a) Viewed in the light of the overall context in which that provision operates and in light of the other disposal events, it seems to me that the reference to a “cessation” of ownership in sub-s (1)(a) implies that, for that provision to operate, it is not sufficient for the taxpayer to give up or lose the bundle of rights and liabilities characteristic of ownership in legal terms if, as is the case here: (i) it does so in the certain knowledge that, barring a wholly unforeseen event, it will re-acquire ownership within a matter of weeks, and (ii) the temporary loss of ownership was effected as the first step in a composite scheme each element of which was carefully crafted to ensure that the scheme would operate to deliver additional “magical” qualifying expenditure for the taxpayer of£95 without it suffering an actual cost of that amount. In other words, there is no such cessation of ownership on a sale of assets which was effected to generate a loss of ownership, which it was known from the outset would be for a very short period only, as an essential ingredient in an artificial construct to manufacture “qualifying expenditure”. (b) Accordingly, the sales proceeds received by the appellants on the sale cannot be viewed as comprising a “real” disposal value which is required to be brought into account in a capital allowances adjustment. These sums were merely monies put into a loop for the appellants to use to generate supposed “qualifying expenditure” by paying the Option Price when the Put Options were exercised.”
“(1) Section 61(1)(a) is to be applied by reference to a snapshot in time, not over a period of time. If a person “ceases to own” an asset at any particular point in time, that is a trigger for a disposal event and a disposal value. If another person “owns” the asset as a consequence of incurring capital expenditure on it, the purchaser is entitled to allowances by virtue of s11. Therefore, s61(1)(a) refers to events that can mark the end of one person’s “ownership” of an asset and the beginning of another person’s ownership. (2) Section 61(1)(a) does not expressly invite any analysis of why a person ceases to own an asset. (3) Section 61(1)(a) does not invite any analysis of whether it is possible, likely or preordained that a person will become an owner of the asset again in the future. This is by contrast with ss61(1)(b), (c) and (d) which defines different disposal events by reference to concepts of permanence. Thus, to count as a disposal event under s61(1)(b), it must be reasonable to assume that any loss of plant and machinery is “permanent”
“It is important to bear in mind that the question whether the equipment “belongs” to the taxpayer company does not fall to be answered once and for all at one particular date. The question has to be answered in relation to each chargeable period; moreover, in calculating the disposal value which has to be brought into account for the purpose of the balancing charge, it is necessary to determine whether and when the equipment has ceased “to belong to” the taxpayer: section 44(5)(c). Therefore, in construing the word “belongs” as used in section 44 one would expect, first, that the question whether equipment belongs or has ceased to belong to the taxpayer would be capable of a ready answer and, second, that the taxpayer could control, or at least be aware of, circumstances which caused the property to cease to belong to him. Yet if the taxpayer companies’ submission is correct, equipment which belongs to them could at any time “cease to belong” thereby giving rise to a balancing charge, without the taxpayer companies knowing anything about it.”
“I therefore reach the conclusion that for the purposes of section 44 property belongs to a person if he is, in law or in equity, the absolute owner of it. Such a construction reflects the obvious, prima facie, meaning of the word: what belongs to me is what I own. It produces a coherent and easily applicable formula and, save in relation to fixtures, avoids anomalous results.”
“I agree that “belong” and “belonging” are not terms of art. They are ordinary English words. It seems to me that, in ordinary usage, they would not be satisfied by limited interests. For example, I do not think one would say that a chattel “belongs” to X if he merely had the right to use it for five years.”
“88. Those statements were not made in the context of the kind of transaction with which we are concerned. However, in our judgment, they provide a clear indication that, when determining whether the appellants ceased to own the Assets when they sold them to SGLJ, s61(1)(a) focuses on whether the appellants lost legal and beneficial ownership at that point. Moreover, the statement that the “belonging” condition should be “capable of a ready answer” points against HMRC’s argument that the existence or otherwise of a future “pre-ordained” plan for the appellants to re-acquire ownership of the Assets prevented them from ceasing to own them. On that interpretation, a taxpayer facing a disposal event under s61(1)(a) could assert to HMRC that, in fact, no such disposal value should be brought into account because, even though legal and beneficial ownership had been lost, there was a pre-ordained plan for the taxpayer to reacquire ownership. If that were right, the focus of the enquiry would become whether the arrangement truly was pre-ordained, with further difficult and uncertain questions arising if the intention of one party or another to participate in the pre-ordained plan changed.”
“90. HMRC argue that the point made in paragraph 82(2) is of no significance. They argue that, whether express reference is made to a person’s purpose or not, s61(1)(a) is concerned only with “real world” transactions and that in Melluish itself, the House of Lords based its reasoning on a need to avoid “anomalous results” (see 974d).While we accept that the point in paragraph 82(2) provides a more slender indication of the correct purposive construction, we do not accept HMRC’s submission that it is devoid of weight. We are prepared to accept HMRC’s argument that s61(1)(a) can, at a high degree of generality, be said to be concerned with “real world” transactions. However, HMRC have not explained why precisely Parliament provided in s61(1)(a) for the sale of the Assets not to be “real world” in the requisite sense. We quite understand that HMRC object to the tax analysis that is said to arise as a consequence of the Lease, the Put Option and its subsequent exercise. However, that does not, in itself, explain why, as a matter of construction, s61(1)(a) invites a consideration of the consequences of those transactions when deciding whether the appellants ceased to own the Assets when they sold them to SGLJ, in circumstances where those other transactions did not in fact prevent a cessation of legal and beneficial ownership.”
“23. In my opinion, the legislature cannot have intended the meaning of a subsection to change as a result of amendments to other provisions of the same statute, when no amendments were made to that subsection, unless, of course, the effect of one of the amendments was, for instance, to change the definition of an expression used in the subsection.”
“The problem with the FTT’s conclusion was not that its factual findings in this regard were wrong. Rather, they were not relevant to the enquiry that s61(1)(a), construed purposively, required.”
“95. However, we do not consider that these cases justify the outcome for which HMRC argue. First, they were concerned with different statutory provisions. In Carreras, the Privy Council reached its conclusion by reference to the purpose of the relevant Jamaican statute imposing transfer tax. That gave rise to very different purposive considerations from those arising under s61(1)(a). In ScottishProvident, the House of Lords was considering the interpretation of the word “entitlement” whereas in this case we are concerned with the question of whether a person “ceases to own” plant and machinery in circumstances where other parties may be affected by the answer to that question, with a corresponding need for it to be “capable of a ready answer” as Lord Browne-Wilkinson put it in Melluish. In any event, the nature of the analysis in Scottish Provident was very different. In that case, the two cross options were both exercisable at the same points of time. Any gilts that Citibank sought to acquire on exercise of its option could immediately be taken away from it by the exercise of Scottish Provident’s option. The House of Lords held that, once commercially irrelevant contingencies were ignored, there was no point in time at which Citibank had an “entitlement” to the gilts. Our case is different. For a period of three or four weeks, the appellants did not have legal or beneficial ownership of the Assets, but SGLJ did. HMRC’s argument is that the sale of the Assets should not be treated as falling within s61(1)(a) because a later sale back of those Assets on exercise of the Put Option was pre-ordained. We see no reason why the very different analysis in ScottishProvident should apply in our case given the different statutory provisions with which we are concerned.”
“32. The essence of the new approach was to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall effect of a number of elements intended to operate together) answered to the statutory description. Of course this does not mean that the courts have to put their reasoning into the straitjacket of first construing the statute in the abstract and then looking at the facts. It might be more convenient to analyse the facts and then ask whether they satisfy the requirements of the statute. But however one approaches the matter, the question is always whether the relevant provision of the statute, upon its true construction, applies to the facts as found. As Lord Nicholls of Birkenhead said in MacNiven v Westmoreland Investments Ltd[2003] 1 AC 311 , 320, para 8: “The paramount question always is one of interpretation of the particular statutory provision and its application to the facts of the case.””
“3. A trader computing his profits or losses will ordinarily make some deduction for depreciation in the value of the machinery or plant which he uses. Otherwise the computation will take no account of the need for the eventual replacement of wasting assets and the true profits will be overstated. But the computation required by Schedule D (whether for the purpose of income or corporation tax) has always excluded such a deduction. Parliament therefore makes separate provision for depreciation by means of capital allowances against what would otherwise be taxable income. In addition, generous initial or first-year allowances, exceeding actual depreciation, are sometimes provided as a positive incentive to investment in new plant.”
“19. … In practice, generous first-year allowances have also provided a positive incentive to artificial tax avoidance schemes.”
“It is the task of the court to ascertain the legal nature of any transaction to which it is sought to attach a tax or a tax consequence and if that emerges from a series or combination of transactions, intended to operate as such, it is that series or combination which may be regarded.”
“To force the courts to adopt, in relation to closely integrated situations, a step by step, dissecting, approach which the parties themselves may have negated, would be a denial rather than an affirmation of the true judicial process. In each case the facts must be established, and a legal analysis made: legislation cannot be required or even be desirable to enable the courts to arrive at a conclusion which corresponds with the parties’ own intentions.”
“38. The Taxpayers’ third point involves a dispute about whether it is open to this Court to apply a Ramsay analysis to a part of the arrangements which was not directly challenged before the FTT, in circumstances where the FTT made findings about the purpose and nature of the arrangements considered compositely but did not make findings specific to the part of the arrangements now under challenge. That is, in my view, a dispute of law, not fact, and it is one which the full Court should determine. This Court would only go on to consider the merits of Ground 2 if satisfied of HMRC's case that it was open, as a matter of law, to this Court to do so.”