Saturday 4 January 2020

W T Ramsey v IRC [1982] AC 300, (1981) 54 TC 101


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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