Archive for January, 2014

In a case which underlines that, when it comes to tax management, complexity does not always equal effectiveness, an investor’s attempt to achieve a £1.2 million income tax deduction through a series of offshore asset transfers has fallen on fallow ground at the Court of Appeal. The relevant tax management scheme involved a transaction whereby gilts were transferred and re-transferred between the investor and a company registered in the British Virgin Islands. The scheme sought to exploit the fact that tax legislation offers two separate forms of relief in some circumstances where securities are transferred. However, it would only be effective if it could be established that both ‘accrued interest’ relief and ‘manufactured interest’ relief were applicable. HM Revenue and Customs (HMRC) disputed the deduction claimed and the First-tier Tribunal, whilst accepting that accrued interest relief was available, ruled that manufactured ... Read more