It was a majority verdict 4 against 1, the leading speech was delivered by Lord Wilson, Lords Hope, Walker and Clarke supporting and Lord Mance dissenting.
Five points emerge from the case:
1. HMRC can be bound by statements which do not accord with the "ordinary law"
Although the parties agreed that HMRC could be bound by a statement which did not accord with the law, the decision implicitly accepts that that is the case and points to the wide discretion which HMRC has in the collection of tax. HMRC does not have to collect every last half penny in tax theoretically due. The collection of tax, to be efficient, must be based on a relationship of trust and reliance on published statements is central to that proposition.
2. Whether in any given case a leaflet may override the law is a question of construction
Lord Wilson did not admit evidence of the actual law in construing the booklet (i.e. that there had to be a "clean break" to lose UK residence and assume residence in a foreign territory). He recited the actual law but dismisses it as not being relevant to the case. He said it was a question of construction. He looked at the criteria set out in the booklet to lose UK residence and take up residence elsewhere and concluded that, as a matter of construction, a clean break is required.
3. The guidance must be clear, unambiguous and free of qualification whether addressed to a particular taxpayer or the world at large
The guidance must be clear and unequivocal. The booklet has to be read as a whole to determine the meaning. The test to be applied is "what would the hypothetical sophisticated taxpayer consider the booklet to mean, irrespective of whether he has received professional advice?" General caveats that any guidance is general only were not given much weight.
In the absence of such a clear statement reference would have to be made to the general law.
4. HMRC practice (as opposed to published statements) may override the ordinary law but very strong evidence would be needed to support this proposition
To assess this issue, the ordinary law had to be understood. The practice has to be so unambiguous, so widespread, so well established and so well recognised as to carry with it a commitment to a group of taxpayers of treatment in accordance with it. Mere anecdotal evidence was insufficient, no matter how respected the witness may be providing that evidence.
5. Administrative law points must be heard first
Whether a taxpayer's liability can be affected by a leaflet or guidance is an administrative law point and that point should be resolved before the statutory appeal is heard in the First-tier Tribunal.
The Court considered it lamentable that the First-tier Tribunal had considered the residence status of Mr Gaines-Cooper before the issue before the Supreme Court had been determined.