G6: IHT Determinations

- Must be view of the law that is viewed generally as being likely to be correct or adopted in practice, rather than simply well known

"[86] In my view:

(1)          It is likely that, in choosing to use the term "received" the legislature intended s 255 to apply where the relevant view of the law is viewed generally (by relevant persons) as being correct or, at least, likely to be correct, and not merely where the view of the law is well publicised and generally known to relevant persons. That is a well-known and understood meaning of "received" when applied, in effect, to a state of knowledge or way of doing something. I note HMRC's contention that the legislature would have used the term "accepted" (or something similar) if this test was meant to have the meaning I ascribe to it. However, I consider that this interpretation reflects a natural, plain meaning of "received" (as in "received wisdom") whereas HMRC's interpretation does not sit well with any natural meaning of the term. It would be an odd use of language to refer to a well-publicised view of the law which is accessible and known to relevant persons by using the one word reference to a "received" view of the law.

(2)          (a) I do not accept that applying the received test in this way involves any particular difficulty as it requires consideration of the relevant persons' subjective views of the relevant view of the law; that can be determined by an objective assessment of the available evidence such as commentary in the textbooks and other published materials and the actions of relevant persons, and (b) As Mr Ewart said, it is reasonable to suppose that the legislature intended to set the bar somewhat higher than would apply on HMRC's interpretation, given that the effect of s 255 applying may be that tax is due at a higher or lesser amount than would be due on the correct view of the applicable law. It would be very surprising if the effect of this provision were that HMRC could, in effect, override the law as correctly interpreted, if their official view is not in accordance with that, simply where that official view is published and widely known, even if it were thought generally by relevant persons to be incorrect.

(3)          As the parties were agreed, the adopted test requires consideration of what course of action people took, in real life situations, as regards the relevant view of the law. On its natural meaning, the term carries the connotation that the view of the law must be taken on board in a positive sense that it is used, followed, or acted in accordance with in a way which shows it was viewed as correct or highly likely to be correct. To my mind, as Mr Ewart submitted, taking a course of action which it is thought would achieve the desired result without falling within the parameters of the relevant view of the law, thereby avoiding a potential conflict with HMRC, does not amount to adopting that view in the required positive sense the use of that term implies. The same point made in (2)(a) applies here also and similarly to the point made in 2(b), given the nature and effect of the provision, I consider it reasonable to suppose that the legislature did not intend HMRC's view of the law to override the actual law unless relevant persons generally acted on it on the basis it is correct/highly likely to be correct.

(4)          Overall, whilst there may be some overlap between the two tests, essentially the difference appears to be that (a) the focus under the received test is on whether the relevant view of the law is generally accepted by relevant persons as correct/highly likely to be correct as a theoretical matter of intellectual analysis, and (b) the focus under the adopted test is on whether the relevant view of the law is accepted as correct/highly likely to be correct by relevant persons as demonstrated by the actions they take in practice." (Accuro Trust (Switzerland) SA v. HMRC [2025] UKFTT 464 (TC), Judge Morgan)

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