High Court rejects tax avoidance appeal
4 Aug 08
The High Court in London has dismissed appeals by two sample participants in a tax avoidance scheme based on the definition of relevant discounted securities which, if successful, would have generated losses of £156m in 2001-02
The Special Commissioner found that the scheme was entirely artificial and the taxpayers’ only purpose in entering into it was to generate a loss to set against taxable income.
The security was not a relevant discounted security because the terms under which it might be redeemed at a deep gain would never occur.
In the High Court, Mr Justice Peter Smith said he believed the commissioner could not have reached any other conclusion. There were no grounds for suggesting he had come to factual conclusions he was not entitled to reach, and nothing to suggest that he incorrectly applied the law.