Revenue Rule

Before rejecting the taxpayer's submission that Article 25A of the Convention between South Africa and the U.K. did not apply to permit the collection through the respondent (HMRC) of South African tax debts of the taxpayer arising prior to the coming into force of the Convention, Lloyd Jones LJ stated (at para. 23):

For centuries, courts in this jurisdiction have refused to entertain claims for the enforcement of revenue or other public laws of a foreign State (See, for example, Government of India v Taylor [1955] AC 491). …[T]his reflects a well-established and almost universal principle that the courts of one country will not enforce the penal and revenue laws of another country. The principle is, however, subject to contrary agreement by treaty… .

The day before going into liquidation, the directors of a company transferred all the company's assets to an overseas bank, with the equivalent sum of money appearing in the defendant's account in another overseas bank. The claim of the liquidator of the company against the defendant was unenforceable given that the interests of the liquidator of the plaintiff were aligned with those of the UK Inland Revenue as the sole creditor of the company at the time of the action and given that the current liquidator had been appointed by the UK Inland Revenue.