Bayfine UK v HM Revenue and Customs Commissioners [2011] EWCA Civ 304, [2011] All ER (D) 266 (Mar)
The opening words of Art 1(4) of the US/UK Double Taxation Convention (the Treaty) (as set out in Pt I of Sch 1 to the Double Taxation Relief (Taxes on Income)) (The United States of America) Order 1980, (SI 1980/568) were intended to achieve a particular outcome and were not descriptive of the manner in which that outcome was to be achieved.
Under Art 1(3), a contracting state was entitled to depart from the Treaty, but only on terms that the specified outcome was attained. That outcome was that there should be no interference with the operation of certain articles, including Art 23. Since the focus was on outcome, and not on means of achieving that outcome, the expression had to be one which was capable of being achieved by different means according to the outcome.
The purpose of Art 23 was to eliminate double taxation and prevent fiscal evasion, which would include the avoidance of taxation. That latter purpose included not providing a taxpayer with relief in both contracting
