A UK resident and domiciled individual (P) borrowed money from an employer financed retirement benefits scheme (EFRBS) in the Isle of Man. The funds from the EFRBS were paid to a bank account of P’s in the Isle of Man.
P paid interest on the loans from his Isle of Man bank account, to an Isle of Man bank account of the EFRBS trustee. HM Revenue and Customs (HMRC) assessed P for income tax (under ITA 2007, s 963) which it was considered should have been deducted in making the interest payments to the Isle of Man trustee (under ITA 2007, s 874). P appealed.
The First-tier Tribunal (FTT) concluded that the Isle of Man Courts would have jurisdiction over any dispute in connection with the loan agreement, and that the situs of P’s obligation under the loan agreement was in England. The FTT considered various case law, including the ‘Greek Bank Case’ (Westminster Bank Executor and Trustee(
