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HMRC internal manual

International Exchange of Information Manual

What is a ruling: Legitimate expectation

IEIM520100: What is a ruling? Legitimate expectation


In most cases it will be clear when a customer is entitled to rely on statements given by HMRC, and we will have provided an opinion or agreement, or some advice, with the intention and expectation that they will rely upon it; we will also have made that intention clear.  Where HMRC intends that a customer should be able to rely on a statement it is normal to use the statutory or non-statutory clearance process. 

It is possible for HMRC to make a statement in other circumstances upon which the customer could be entitled to rely.  If the customer is in a position to establish that they have a legitimate expectation that they can rely on what we have said, then we can assume they can rely on it in terms of whether what we have provided is a ruling.

Whether any particular ruling has created a legitimate expectation will depend on the facts of each case.  A legitimate expectation is likely to arise wherever we provide the customer with:

  • A considered view of the tax treatment of a particular matter
  • Based on consideration of the facts and our opinion of them
  • Even where we do not specifically intend our view to be legally binding

This need not include examination of background documents or discussions with the customer; the important thing is whether relevant and sufficient facts are provided to satisfy HMRC that an agreement or opinion can be given. 

The more detailed our consideration, and the firmer the assurances given, the more likely it is that a customer could argue that they are entitled to rely upon our statements because they have a legitimate expectation that the view we have given is binding.


Caveats in the ruling

It is normal practice for HMRC to caveat clearances and other agreements or opinions to ensure that it is clear they are dependent on the facts provided.  These caveats do not stop the agreement or opinion from giving legitimate expectation. 

See IEIM520600 on situations where the event or transaction is not carried out as notified, and IEIM511000 for situations where we refuse to provide a clearance or opinion.


Situations that will always create legitimate expectation

As a general guide there will be a sufficient consideration of the facts, and an intention that our view is binding in the following circumstances:

  • All statutory clearances
  • All non-statutory clearances
  • All bilateral APAs
  • All unilateral APAs and advance thin capitalisation agreements


Situations that will not give rise to legitimate expectation

Where there are insufficient facts for any opinion or agreement to be given, or where our response is not specific to the customer, no legitimate expectation is provided.  

In particular the following will not be rulings:

  • The customer has not described all of the relevant facts to HMRC and we tell them we cannot give them assurance because we do not have sufficient detail (IEIM511000 on refusing to provide a ruling)
  • HMRC refers the customer to published guidance and does not tailor its advice to the specific situation of the customer (IEIM520700 on general advice)