APR and BPR: An Advocate’s View

Posted: May 1, 2007

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Introduction

The title of this paper includes the term 'An Advocate's View'. Perhaps the main feature of practice at the tax bar that distinguishes it from other types of tax practice is that more time is spent litigating, and the litigation often tends to be post-event disaster management rather than defending a well-planned structure. The purpose of litigation, at least in the tax field, is to persuade a judge to reach a particular conclusion, having regard to the law and the facts. In seeking to achieve this purpose, some facts are better than others. So part of the advocate's task is to persuade a judge to find that the good facts occurred whereas the bad facts did not. For this, what is required is evidence. Accordingly, I am going to discuss what sorts of facts might have to be proved to a court, and what evidence one might adduce to try to prove them.

I shall divide this paper into four sections. The first section is general points about evidence. After that I shall discuss agricultural property relief, then business property relief, and finally minimum periods of ownership.

General points about evidence

Key to persuading a judge to find a particular fact is quality of evidence. So in general, a document is better than a witness, and an independent witness better than a party. But if there is to be any evidence at all, it is almost always necessary to have the taxpayer as a witness. Apart from anything else, the court may become suspicious if it does not get the opportunity to listen to the taxpayer being cross-examined, and to ask him questions itself.

A second point is that one must be careful to ensure that one is taking to the court evidence to justify every finding in fact that one is going to seek. The only way to ensure this is hard work. Write down a list of all the facts you want to prove. This should include not only the principal facts that, according to the view you have taken of the law, entitle you to succeed, but also all the other facts that are consistent with and support those principal ones. Once you have done this, for every fact listed, identify the source of evidence you are going to rely on as proving that that fact occurred. Where the source is a document, identify the witness you are going to rely on for evidence that the document is genuine. For every source listed, consider whether there might somewhere be a better source. If there is, obtain it, and use it instead. If any better source is not available (for example a document has been lost or destroyed), be ready with, and give, the explanation as to why you do not have it.

When an expert is to be used, a number of factors must be considered. Principal among them is that the expert should have the right expertise. But in addition, the matters about which the expert is to give his opinion must be clearly identified to him.

Finally, make sure that you have enough copies of the documents for everyone who is going to be at the hearing. This is normally at least four. One for yourself, one for the judge (if there is more than one person sitting, then one for each of them), one for the witness, and one for the other side. Lodge the copies for the judge and for the witness a few days in advance of the hearing, so that the judge can read them in advance if he wants, and so that on the day the clerk will have the documents in order and ready to be handed up to the witness when required during examination.

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