The fallout from failed tax saving arrangements using Employee Benefit Trusts (“EBTs”) continues. In Hunt, directors who in reliance on tax advice from a firm of accountants, arranged for a company to use an EBT, were found not in breach of duty. The decision whilst of comfort to directors, increases the likelihood of recovery actions following failed tax saving schemes shifting back on the accountancy firm tax advisors.
Background
Advocates Mathew Newman and Sam Dingle acted for the Joint Administrators of a Guernsey company (Company), which was a party to ongoing court proceedings in England.
The Joint Administrators applied to the Royal Court of Guernsey seeking an order that it issue a Letter of Request to the High Court of Justice of England and Wales, requesting the High Court to act in aid of and auxiliary to the Royal Court pursuant to section 426 of the Insolvency Act 1986 (1986 Act) in recognising the appointment of the Joint Administrators as administrators of the Company.
In a judgment handed down on 13 April 2018, Morgan J entirely dismissed a claim for £35m made against the former directors (and alleged shadow/de facto directors), and professional advisors of Instant Access Properties Limited (IAP).