News archive

Outer House case in which Mrs Gillie, a janitor at Galashiels Academy, sought damages after slipping on Vaseline on the school stairs and sustaining injuries. Mrs Gillie claimed that the accident had occurred as a result of the Council’s breach of 12(3) of the Workplace (Health, Safety & Welfare) Regulations 1992 (which requires that floors and traffic routes in workplaces are kept free from obstructions or substances which may cause a person to slip, trip or fall).

The Council accepted that in all probability the Vaseline had got on the stairs as the result of a prank by sixth formers at the school on what had become a traditional “prank day” on the pupils’ last day at school before study leave. However, the Council argued that they were not liable to Mrs Gillie as it was not reasonably practicable for them to keep the stair free from substances put there as part of a prank.

After considering the authorities on what was reasonably practicable, Lord Boyd noted the following:

1. it was for the Council to establish that it was not reasonably practicable to keep the stair free from the substance upon which Mrs Gillie slipped;
2. the assessment of what is reasonably practicable involves a balancing exercise putting on one side the degree or quantum of risk against the sacrifice in terms of loss of money, time or trouble; and
3. in the assessment of what is reasonably practicable it is relevant to consider whether or not the incidence and nature of the risk was reasonably foreseeable.

Lord Boyd found in favour of the Council. Although the placing or dropping of Vaseline on the stairs risks serious injury, the foreseeability of such an event occurring, as opposed to any other “prank”, was very low indeed. Against that, the time and resources that would have been required to eliminate that risk over and above the measures that the Council had already taken[1], was disproportionate to the risk. Accordingly, in all the circumstances, Lord Boyd was satisfied that it was not reasonably practicable for the Council to ensure that the stair was kept free of Vaseline.

The full judgement is available from Scottish Courts here.

“Applicants applying under the access to funds scheme are reminded that applications in which an incapable adult’s income consists solely of Department of Work and Pensions (DWP) benefits, is likely to be returned.

This is because the least restrictive option, as per of the Adults with Incapacity (Scotland) Act 2000 is to manage an incapable adult’s funds through DWP appointeeship. Sections 1(2) and 1(3) of the the Act provide further guidance to support this.

However, in those circumstances where there is income over and above DWP benefits, such as the individual being in receipt of:

• a private pension,
• savings above the lower capital limit, or
• a lump sum required to pay accrued expenses or debts,

an access to funds application can be completed, if required. This applies to all applicants wishing to make an application to access the adults funds.”

More on this can be found here.”

Sheriff Court case considering a noticed served on Mr and Mrs Sinclair by Fife Council after a retaining wall (which was over 100 years old) owned by Mr and Mrs Sinclair collapsed and damaged a section of Dysart High Street (which was supported by the wall).  The notice was served under section 91(2) of the Roads (Scotland) Act 1984 and required Mr and Mrs Sinclair to (1) replace the collapsed wall with a new wall and foundation; and (2) reinstate the damaged road. (A conservative estimate of the cost reinstatement of the wall was said to be £200k.)

The Sinclairs challenged the notice under s91(9) of the 1984 Act which allows a person in receipt of a notice to refer the matter by summary application to the sheriff.

In the sheriff court it was found that, whilst the Council was entitled to serve a notice in respect of repairs to the wall, it was not entitled to do so in respect of the reinstatement of the road. The notice could be served on Mr and Mrs Sinclair as owners of the wall because the wall was in such condition that it was a danger to the road or road users. However, the same was not the case with the road. They did not own the road or the solum and were not responsible for its maintenance. Any works to the road would require the Council’s consent in terms of s56 of the 1984 Act and that could not be given in advance in the notice.

The quashing of the part of the notice referring to the road did not invalidate the remainder of the notice which referred to the wall. But, although the part of the notice referring the wall was valid, the court found that its requirements were unreasonable. In coming to this conclusion the court took account of the following:

1. The use of the road and the benefit the Council derived from the wall: the road was a busy thoroughfare through Dysart used by, amongst other things, buses, refuse lorries and other public utility vehicles. The support provided by the wall was central to the safe keeping of the road and, as a result, the council kept a register of retaining walls and carried out regular inspections. Although the inspections identified a bulge, more detailed tests to identify the danger the bulge represented were not carried out. It was also known by the Council’s engineers that the wall’s random rubble construction was not suitable for its purpose as a retaining wall and yet the council did not further examine the wall to assess its fitness for purpose.
2. The causes of the collapse: a number of factors were put forward as reasons for the collapse but it was agreed that backfill[1], which was owned entirely by the Council and over which the Sinclairs had no control, was an important factor in the collapse. The road had also been disturbed by the Council and utility companies.
3. Although it was of significance that the Council had in no way contributed to the collapse of the wall by act or omission, if the inspection regime had been more rigorous failings in the wall would have been identified and action taken.
4. The council required the replacement wall to meet modern design standards which would result in a significant improvement to their roads infrastructure at no cost to them.

The Council had the discretion to pay for or contribute to the costs of the remedial work but chose not to. Given the history of events leading to the collapse, the court found that decision to be unreasonable and, as a result, quashed the whole notice.

 The full judgement is available from Scottish Courts here.

HMRC has added new guidance to its inheritance tax manual regarding the entitlement of a farmhouse to agricultural property relief under the character appropriate test.

The guidance reflects the taxpayer’s victory at the First-tier Tribunal in Golding v HMRC [2011] UKFTT 351 (TC)). 

More on this can be found here.

Let’s start with Scotland.

According to a new report by the Scottish Government, the tax-take per person is higher in Scotland that the rest of the UK.  Finance Secretary John Swinney says the analysis of tax revenue over three decades proves the country “more than pays its way”.  More on this from the Herald can be found here and the Scottish Government here. 

One of the UK’s foremost ­experts on devolution has warned that new tax-raising powers for the Scottish Parliament have “serious limitations”.  Speaking to Holyrood’s ­finance committee, Gerard Holtham, who chaired a commission in Wales examining the case for more devolved powers for the principality, backed a much wider remit to allow the Scottish Parliament to vary individual bands within the income tax system.

Under the forthcoming Scotland Act powers, Holyrood will take control of a new Scottish rate of income tax, allowing MSPs to reduce or increase the levy as they see fit.  However, they will not be able to change the rates within the system, meaning that any change will apply to lower, middle and higher rates equally.  As I have argued on numerous occasions the Scotland Act 2012 income tax proposal is a mess and does not devolve any meaningful power to the Scottish Parliament.  More on this from the Scotsman can be found here here.

Interesting to see how the First Minister of Wales is following the First Minister of Northern Ireland.  They are both trying to use the Scottish independence referendum as a means to pressure the UK Government into devolving tax and fiscal powers.  More on this from the BBC news website can be found here.

An explanation as to why the First Ministers feel that they have to use this type of argument is shown by the failure of the UK Government to devolve air passenger duty.  Not all of the Calman Commission proposals were implemented by the UK Government.  Air passenger duty was one of the taxes although recommended for devolving was not devolved.  That is why the Scotland Act 2012 is called “Calman minus”.  That is also why we are still hearing calls for air passenger duty to be devolved.  More on this from the BBC news website can be found here.

It also seems that London does not want to be left behind.  Boris Johnson, the Mayor of London, is again calling for new financial powers for London.  The proposals, by the London Financial Commission who were appointed by Johnson, call for London to have the power to raise property and tourism taxes, and various housing and infrastructure spending powers.  More on this from the Guardian can be found here.  No matter the result of the Scottish independence referendum pressure on the UK Government to devolve power away from London, and ironically to London, will continue.  What is particularly interesting is that this does not just mean Scotland but almost every part of the UK.

The UK Chancellor should stop discriminating against visiting foreign musicians and artists by denying them tax breaks which are offered to top foreign footballers and athletes, leaders of Britain’s biggest orchestras have argued.  More on this from the Telegraph can be found here.

Launched in June 2010 by the UK coalition government, the National Insurance “holiday scheme” was aimed at cutting staffing costs for newly-established businesses outside London and the south-east of England.  Eligible firms do not have to pay NI contributions for their first ten employees, with a maximum saving of £5,000 per staff member in their first year.  However, the initiative, which is due to end in September, has failed to live up to its promise and it seems only a few companies have benefited from it. More on this from the Scotsman can be found here.

The House of Commons Public Accounts Committee has claimed that the UK’s largest accountancy firms are using inside knowledge from staff seconded to HM Treasury to help leading companies and wealthy individuals avoid paying UK taxes.  The Public Accounts Committee has also recommended that these companies should be prevented from advising the UK Government on tax law.  In its report on this issue they also claim that these firms have “undue influence over the tax system”.  More on this from the BBC News website can be found here.

A controversial “sweetheart” tax deal between HMRC and Goldman Sachs worth up to £20m, was agreed in part to avoid embarrassment to George Osborne, according to the UK Government’s former head of tax.  Dave Hartnett has said that he decided to settle the long-running dispute after Goldman Sachs threatened to pull out of a prized new tax framework a week after the UK Chancellor had announced that the bank had signed up to it. More on this can be found here.

HMRC raises yield from wealthy taxpayers again.  The top 1% of earners paid 26.5% of the total income tax take in 2012/13, according to figures from HMRC.  More on this from the STEP journal can be found here.

The Scottish Government has published a bill aimed at tackling illegal dumping. The Landfill Tax (Scotland) Bill will transfer responsibility from the UK Government for administering the tax and encourage the proper disposal and recycling of waste.  More on this can be found here.

The Financial Transactions Tax has been in the news again.  The negative reaction from the City of London is as expected.  What is slightly more surprising is how far the UK Government will go to prevent this tax from coming into existence.  The UK Government has launched a legal challenge against plans for a European Financial Transactions Tax.  More on the UK Government’s challenge from the BBC news website can be found here and more generally from the Telegraph here.

Now to an example of European cooperation.  The UK Chancellor of the Exchequer has signed an information exchange agreement with the finance ministers of France, Germany, Italy and Spain in yet another attempt to crack down on tax evasion.  Under the agreement, banks in these countries will be forced to reveal financial details of foreign clients.  More on this can be found here.

Now to matters further afield and a relatively new area for taxation, the internet.  By a vote of 75 to 24, US senators adopted an amendment to a Democratic budget resolution that, by allowing states to “collect taxes on remote sales,” is intended to eventually usher in the first national, i.e. American  internet sales tax.  More on this can be found here and here.

Now to Greece.  The International Monetary Fund has criticised Greece for making very little progress in tackling its notorious tax evasion problem.  It says the rich and self-employed ‘are simply not paying their fair share’ and the tax authorities are still bedevilled by ‘pervasive political interference’.  The IMF also said that Greece is making progress in overcoming deep-seated problems in the midst of a very serious and socially painful recession. More on this can be found here. 

Finally the not unexpected news that Silvio Berlusconi’s four-year conviction for tax fraud on TV rights bought by his Mediaset TV empire has been upheld.  Mr Berlusconi had appealed against a sentence passed by a lower court in 2012, which had found him guilty of tax fraud, but the appeals court reinstated the 2012 conviction and said he should serve four years in jail. More on this can be found here here.

Have a good weekend. 

Petition for judicial review of a decision by Highland Council to grant planning permission for a development of 64 houses at Resaurie near Inverness.

The petitioners (who lived nearby the proposed development) had two main arguments:

1. In making its decision, the Council should have had regard to the increased risk of ground water flooding to the petitioners’ property and other properties on the boundary of the site.
2. The Council should also have had regard to a change of planning policy (in the interval between the resolution to grant consent and the formal grant) which introduced a requirement to take a precautionary approach to flood risk.

The petition was refused by Lord Pentland in the Outer House and an appeal to the Inner House was also refused. The court found that the issue of groundwater had been before the Council when they took their decision to grant planning permission and it could not be argued that they failed to take account of it.  Issues of groundwater flooding had been considered and addressed by the professionals advising the developers, and had been fairly put before the Council. (The court also noted that the weight to be attached to a relevant consideration is a matter for the decision-maker, provided that he does not act unreasonably.)

With regard to the change of planning policy, although the Inner House disagreed (“with some hesitation”) with Lord Pentland’s finding that there had been no material change to the planning policy, it found that the amendments made had been slight and amounted to mere fine tuning. The court had also been told that the Council’s planning officer had considered the terms of the planning policy and reached the view that both the developer and the Council had in fact taken a precautionary approach in relation to the proposed development. The court did not consider that the planning officer could be said to have erred in reaching that conclusion.

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Legislation introduced in Finance Bill 2013 puts the rules which determine an individual’s tax residence on a statutory basis.

HMRC has published guidance to help customers decide if they are resident in the UK for the purposes of paying tax.

The guidance can be found here.

Sheriff Court case concerning missives of let for premises at 34-39 Ann Street in Aberdeen. The missives were dated 13 September 2006 and annexed to them was a draft lease. However, the lease was never engrossed and signed by the parties.

Although the missives provided for a lease with a term of ten years, they also contained a supersession clause providing that the missives would cease to have effect after a period of 2 years.

Speedy contended that, as no lease was signed, the formal written lease came to an end when the missives ceased to be enforceable on 13 September 2008. Thereafter the lease continued from year to year by tacit relocation until Speedy served a notice to quit on 9 December 2010 and left the premises on 13 September 2011. The Sheriff agreed with that argument and dismissed Gilcomston’s action for declarator that the parties were bound by a valid and enforceable lease for a period of 10 years from 13 September 2006.

The full judgement is available from Scottish Courts here.

An interesting case concerning an attempt to have a Will set aside.

The deceased’s children attempted to overturn their father’s Will on the basis that their father was delusional.  Their father left almost £6.7 million largely  to a charitable trust.

The Court of Session however was “not satisfied that the pursuer [the children] have established that there were periods when the testator’s paranoid personality disorder was of such delusional intensity as to deprive him of testamentary capacity. ”   In other words, although the testator was paranoid he still had mental capacity

The case report can be found here and a report from the Herald here.

The UK Government has launched the Charities Online system allowing charities and sports clubs to claim gift aid repayments via HMRC‘s website.

The Gift Aid Small Donations Scheme has also gone live, allowing charities to claim top-up payments on cash donations of up to £20 without donor declarations.

More on this can be found here.