Burying the Duke forever

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I have been asked this morning:

As a major proponent of a GANTIP, how do you regard the Duke of Westminster principle in the modern environment?

For those in doubt the Duke of Westminster principle says:

Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.

Or so said Thomas Tomlin, Baron Tomlin, in the UK House of Lords case, IRC v. Duke of Westminster (1936) 19 TC 490, [1936] AC 1.

I reject this notion. It is bad law. It is poor jurisprudence. It has no statutory basis. It is as outmoded as much else that was accepted in the 1930s as being socially acceptable.

The modern alternative is:

Every person has a duty to be tax compliant. Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.

That’s what I believe.


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