STEP says Hastings Bass judgement severely restricts taxpayers ability to rectify inaccurate advice

The Society of Trust and Estate Practitioners (STEP) have recently alerted members to the worrying implications of HMRC's successful appeals in Pitt v Holt and Futter v Futter. The particulars of the two cases are delved into by the STEP Technical Committee; they look at the manner in which the England & Wales Court of Appeal severely restricted the scope of the Hastings-Bass nullification principle. The Court of Appeal has ruled in favour of HMRC in two cases concerning the application of the widely known Hasting-Bass principle.

Wendy Walton, Chair of Technical Committee at the Society of Trust and Estate Practitioners said "The consequence for taxpayers and trustees of this case is that it severely restricts their ability to set aside inaccurate tax advice.”

Put simply, the 1974 Hasting-Bass case concerned a transaction entered into by trustees which had an unintended result. The Court allowed the transaction by the trustees to be set aside. In a few cases in the intervening years the principle had been invoked where a transaction had not produced the desired result and where it was clear that the trustees had not given due consideration to several aspects of the transaction. The Court allowed the action to be completely voided.