This case sets out a general principle that over a series of
transactions, the Courts can look at the overall effect and determine the tax
liability on the scheme as a whole. It
is an important restraint on creative tax planning.
An interesting way to analyse these sorts of scheme was that
the steps involved had no commercial significance of any kind apart from to
lower the tax liability that would have been due if those steps had not been
taken. This principle therefore
represents a significant change in the way these sorts of schemes are
approached.
Recent cases have made it clear that statutory application
is still of the utmost importance in such cases. So, the statute applicable to
the situation must be capable of being interpreted in this way and should not
be distorted just to achieve this affect.
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