[Trusevich]

So if the supreme court rule in favour of HMRC would they then become illegal or just subject to taxation?

It would simply mean they would be subject to tax.

It's as simple as this:

They argue that tax should have been due on the EBT payments. Oldco argue that it shouldn't. Whichever way it goes there is no illegality. Tax will either be due or it won't.