Tax Treaty Case Law around the Globe 2013
1. Aufl. 2013
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1. S. 353 Introduction
This case is a nice demonstration of the difference between “subject to tax” and “liable to tax”. It is a First Tier Tax Tribunal decision (i.e. a first level court). Immediately after the judgment, Mr Weiser appeared in a couple of newspapers saying he was going to appeal. However, he may then have realized that it was a very good judgement, and it now appears unlikely that the case is going any further.
Judge Roger Berner, who decided the case, was previously a partner in one of the magic circle law firms; he has international tax experience, and sat quite often as a judge with John Avery Jones.
The case concerns a provision in the UK-Israel DTC, which is an old tax treaty going back to 1963. The treaty goes back to the days when the UK was still putting “subject to tax” clauses in our treaties. The case concerned the pension article of the treaty which said:
“Any pension ... derived from sources within the United Kingdom by an individual who is a resident of Israel and subject to Israel tax in respect thereof, shall be exempt from United Kingdom tax.” (emphasis added)
The pension was exempt from tax in the UK if it was received by a resident of Israel and subject to...