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View Full Version : Ramsay approved



webberg
20th April 2015, 09:21
This is a sister thread to the "Ramsay defeated" header and is an attempt to bring together tax case references and views on each subject rather than have them scattered.

http://www.tribunals.gov.uk/financeandtax/Documents/decisions/Price-v-HMRC.pdf

An UTT decision. The details are complicated and not directly relevant to many contractor loan/ebt/offshore schemes BUT the application of the Ramsay principle is. See para 64 onwards.

It's also interesting that the schemes in question had around 40 participants but HMRC choose a well known name to bring to Court no doubt hoping that the resultant publicity would make more impact.

This is a decision that I suspect will go further and is mired in procedural nonsense about whether an appeal can be made etc, but focus on the Ramsay stuff.

The "bad" news here in any read across for a contractor situation is the placing of the various documents and circular money flows in the context of a scheme which had the aim of generating a tax loss.

The "good" news is that the scheme was wholly artificial and had no commercial purpose. The Court accepted that the loan (on unusually generous terms) was not real ONLY because it was so closely linked with another transaction (sale of option) and the lender was a connected entity. In the EBT/loan contractor schemes I think this is legally not the case.

As always, do not read ONE decision and decide that you are safe/unsafe. You have to take into account the whole range of cases and try to extract themes because you will never get an exact match to your circumstances until your case reaches a Court.