Tax Avoidance - Revision history

Ruth Shaw at 11:41, 21 October 2026

2026-10-21T11:41:10Z

Ruth Shaw at 14:05, 15 October 2026

2026-10-15T14:05:15Z

Ruth Shaw at 11:00, 18 September 2026

2026-09-18T11:00:47Z

Ruth Shaw: /* "Tax Gap" */

2026-08-05T11:20:51Z

‎"Tax Gap"

Ruth Shaw: /* "Tax Gap" */

2026-08-05T11:20:22Z

‎"Tax Gap"

Ruth Shaw: /* "Tax Gap" */

2026-08-05T11:18:50Z

‎"Tax Gap"

Ruth Shaw: /* Categorisation of avoidance */

2026-08-05T11:17:14Z

‎Categorisation of avoidance

Ruth Shaw: /* Pro-avoidance rationale */

2026-08-05T11:15:39Z

‎Pro-avoidance rationale

Ruth Shaw: /* Retrospective legislation: Extent */

2026-08-05T11:14:40Z

‎Retrospective legislation: Extent

Ruth Shaw at 11:13, 5 August 2026

2026-08-05T11:13:01Z

@@ Line 125: / Line 125: @@
 |-
 | ''Ano (No.1) v HMRC'' [2019] UKFTT 406 ||	Pre-entry losses ||	   -
 |-
 |  ''Methanex Trinidad v Inland Revenue'' [2025] UKPC 20 || Treaty shopping || [[Targeted Anti-Avoidance Rules (TAARs)#Artificial: 3 examples | Artificial: 3 examples]]
@@ Line 132: / Line 130: @@
 | ''HMRC v Burlington Loan Management'' [2026] EWCA Civ 461 ||  Treaty shopping ||   [[DTA Anti-abuse Rules#Specific purpose test | Specific purpose test]]
 |-
-| ''HC-One v HMRC'' [2026] UKFTT 678 (TC)  ||	SDLT group relief||  -
+| ''HC-One v HMRC'' [2026] UKFTT 678 (TC)  ||	SDLT group relief||  [[Targeted Anti-Avoidance Rules (TAARs)#SDLT group-relief TAAR | SDLT group-relief TAAR]]
 |}

@@ Line 482: / Line 482: @@
 Since the 1970s there has been no judicial unanimity, and that is still the case today.  So the pendulum seems to swing erratically.  In a rating avoidance case in 2019
-:Views may differ as to whether the purpose for which the SPVs were used was socially reprehensible.<ref>''Hurstwood Properties v Rossendale BC'' [2019] EWCA Civ 364.  The decision was reversed on appeal but without comment on this point.  For other aspects of this case see [[Excluded Property Exemptions#Companies: Situs planning | Companies: Situs planning]]</ref>
+:Views may differ as to whether the purpose for which the SPVs were used was socially reprehensible.<ref>''Hurstwood Properties v Rossendale BC'' [2019] EWCA Civ 364.  The decision was reversed on appeal but without comment on this point.  For other aspects of this case see [[IHT Charges & Excluded Property Exemptions#Companies: Situs planning | Companies: Situs planning]]</ref>
 In ''Purkiss v Kennedy''<ref>[2025] EWCA Civ 268.</ref>  a company entered into an unsuccessful EBT loan scheme.  The company was liable for PAYE and insolvent.

@@ Line 887: / Line 887: @@
 In relation to secondary legislation (statutory instruments) a court could strike down provisions on the grounds of breach of the Rule of Law (which might be said to be ultra vires, in the absence of clear authority in the authorising act of parliament).  In relation to primary legislation, a court could issue a statement of incompatibility.  But in a tax context this has not happened.
-In other words, the Rule of Law lacks full justiciability.  Perhaps ironically, the Rule of Law is not in the strict sense a rule of law. To adopt Dworkin’s distinction, it is a principle and not a rule.  As such it may encourage a court to interpret a statute more narrowly, in favour of the individual.  In this way, however deeply, inchoately, and inconsistently Rule of Law considerations do to some extent affect case law outcomes<ref>In the context of rules which would prevent access to a Court, the Rule of Law affects outcomes more directly; see for example ''Haworth v HMRC'' [2019] EWCA Civ 747 at [66].</ref> and perhaps, tax policy (though I am less sure about that).
+In other words, the Rule of Law lacks full justiciability.  Perhaps ironically, the Rule of Law is not in the strict sense a rule of law. To adopt Dworkin’s distinction, it is a principle and not a rule.  As such it may encourage a court to interpret a statute more narrowly, in favour of the individual.  In this way, however deeply, inchoately, and inconsistently, Rule of Law considerations do to some extent affect case law outcomes<ref>In the context of rules which would prevent access to a Court, the Rule of Law affects outcomes more directly; see for example ''Haworth v HMRC'' [2019] EWCA Civ 747 at [66].</ref> and perhaps, tax policy (though I am less sure about that).
 ===Is tax Rule of Law compliant===

@@ Line 697: / Line 697: @@
 ! scope="col" style="width: 200px;text-align:left;"| '''Subjective<br/><br/> '''
 |-
-| 14.6 || style="vertical-align: top;" | Failure to take reasonable care || || style="vertical-align: top;" | somewhat || style="vertical-align: top;" | no
+| style="vertical-align: top;" |14.6 || style="vertical-align: top;" | Failure to take reasonable care || || style="vertical-align: top;" | somewhat || style="vertical-align: top;" | no
 |-
-| 4.4  || style="vertical-align: top;" | Criminal attacks  || 	|| style="vertical-align: top;" | no || style="vertical-align: top;" | no
+| style="vertical-align: top;" |4.4  || style="vertical-align: top;" | Criminal attacks  || 	|| style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-| 6.4 ||style="vertical-align: top;" |  Evasion   ||    style="vertical-align: top;" |  ''Excluding hidden economy'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
+| style="vertical-align: top;" |6.4 ||style="vertical-align: top;" |  Evasion   ||    style="vertical-align: top;" |  ''Excluding hidden economy'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-| 5.4 ||style="vertical-align: top;" |  Legal interpretation  ||  style="vertical-align: top;" |  ''HMRC disagree with taxpayer/tribunal on tax law (excluding avoidance)' ||style="vertical-align: top;" |  no ||	style="vertical-align: top;" | yes
+| style="vertical-align: top;" | 5.4 ||style="vertical-align: top;" |  Legal interpretation  ||  style="vertical-align: top;" |  ''HMRC disagree with taxpayer/tribunal on tax law (excluding avoidance)' ||style="vertical-align: top;" |  no ||	style="vertical-align: top;" | yes
 |-
-| 5.5 || style="vertical-align: top;" | Non-payment || style="vertical-align: top;" | ''Tax written off as uncollectible'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
+| style="vertical-align: top;" |5.5 || style="vertical-align: top;" | Non-payment || style="vertical-align: top;" | ''Tax written off as uncollectible'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-|  2.6 || style="vertical-align: top;" | Hidden economy ||   style="vertical-align: top;" | ''Income undeclared/understated'' || style="vertical-align: top;" | no	|| style="vertical-align: top;" | no
+|  style="vertical-align: top;" |2.6 || style="vertical-align: top;" | Hidden economy ||   style="vertical-align: top;" | ''Income undeclared/understated'' || style="vertical-align: top;" | no	|| style="vertical-align: top;" | no
 |-
-|   7.1 || style="vertical-align: top;" | [Non-careless] error || style="vertical-align: top;" | -	|| style="vertical-align: top;" | no ||
+|   style="vertical-align: top;" |7.1 || style="vertical-align: top;" | [Non-careless] error || style="vertical-align: top;" | -	|| style="vertical-align: top;" | no ||
 |-
-|   <u>0.7</u> ||  style="vertical-align: top;" | Tax avoidance || style="vertical-align: top;" | - || style="vertical-align: top;" | yes || style="vertical-align: top;" | yes
+|   style="vertical-align: top;" |<u>0.7</u> ||  style="vertical-align: top;" | Tax avoidance || style="vertical-align: top;" | - || style="vertical-align: top;" | yes || style="vertical-align: top;" | yes
 |-
 | <u><span style="border-bottom: 1px double #000;">46.8</span></u> || <u><span style="border-bottom: 1px double #000;">Total</span></u> || colspan="3" |

@@ Line 697: / Line 697: @@
 ! scope="col" style="width: 200px;text-align:left;"| '''Subjective<br/><br/> '''
 |-
-| 14.6 || style="vertical-align: top;" Failure to take reasonable care || || style="vertical-align: top;" somewhat || style="vertical-align: top;" no
+| 14.6 || style="vertical-align: top;" | Failure to take reasonable care || || style="vertical-align: top;" | somewhat || style="vertical-align: top;" | no
 |-
-| 4.4  || style="vertical-align: top;" Criminal attacks  || 	|| style="vertical-align: top;" no || style="vertical-align: top;" no
+| 4.4  || style="vertical-align: top;" | Criminal attacks  || 	|| style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-| 6.4 ||style="vertical-align: top;"  Evasion   ||    style="vertical-align: top;"  ''Excluding hidden economy'' || style="vertical-align: top;" no || style="vertical-align: top;" no
+| 6.4 ||style="vertical-align: top;" |  Evasion   ||    style="vertical-align: top;" |  ''Excluding hidden economy'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-| 5.4 ||style="vertical-align: top;"  Legal interpretation  ||  style="vertical-align: top;"  ''HMRC disagree with taxpayer/tribunal on tax law (excluding avoidance)' ||style="vertical-align: top;"  no ||	style="vertical-align: top;" yes
+| 5.4 ||style="vertical-align: top;" |  Legal interpretation  ||  style="vertical-align: top;" |  ''HMRC disagree with taxpayer/tribunal on tax law (excluding avoidance)' ||style="vertical-align: top;" |  no ||	style="vertical-align: top;" | yes
 |-
-| 5.5 || style="vertical-align: top;" Non-payment || style="vertical-align: top;" ''Tax written off as uncollectible'' || style="vertical-align: top;" no || style="vertical-align: top;" no
+| 5.5 || style="vertical-align: top;" | Non-payment || style="vertical-align: top;" | ''Tax written off as uncollectible'' || style="vertical-align: top;" | no || style="vertical-align: top;" | no
 |-
-|  2.6 || style="vertical-align: top;" Hidden economy ||   style="vertical-align: top;" ''Income undeclared/understated'' || style="vertical-align: top;" no	|| style="vertical-align: top;" no
+|  2.6 || style="vertical-align: top;" | Hidden economy ||   style="vertical-align: top;" | ''Income undeclared/understated'' || style="vertical-align: top;" | no	|| style="vertical-align: top;" | no
 |-
-|   7.1 || style="vertical-align: top;" [Non-careless] error || style="vertical-align: top;" -	|| style="vertical-align: top;" no ||
+|   7.1 || style="vertical-align: top;" | [Non-careless] error || style="vertical-align: top;" | -	|| style="vertical-align: top;" | no ||
 |-
-|   <u>0.7</u> ||  style="vertical-align: top;" Tax avoidance || style="vertical-align: top;" - || style="vertical-align: top;" yes || style="vertical-align: top;" yes
+|   <u>0.7</u> ||  style="vertical-align: top;" | Tax avoidance || style="vertical-align: top;" | - || style="vertical-align: top;" | yes || style="vertical-align: top;" | yes
 |-
 | <u><span style="border-bottom: 1px double #000;">46.8</span></u> || <u><span style="border-bottom: 1px double #000;">Total</span></u> || colspan="3" |

@@ Line 217: / Line 217: @@
 ! scope="col" style="width: 400px;text-align:left;"| '''But for other views see'''
 |-
-| style="vertical-align: top;" |    Advancing/delaying:<br/>(a) disposals for CGT purposes<br/>(b) payment of income (eg dividends or bonus)<br/>(c) pension contributions for IT purposes<br/>in anticipation of change in tax rate or residence status || style="vertical-align: top;" | <br/>[[Chargeable Gains#Binding contract pre-departure | Binding contract pre-departure]]<br/>[[Tax Avoidance#Views of non-tax practitioners | Views of non-tax practitioners]]<br/>
+| style="vertical-align: top;" |    Advancing/delaying:<br/>  (a) disposals for CGT purposes<br/>  (b) payment of income (eg dividends or bonus)<br/>  (c) pension contributions for IT purposes<br/>in anticipation of change in tax rate or residence status || style="vertical-align: top;" | <br/>[[Chargeable Gains#Binding contract pre-departure | Binding contract pre-departure]]<br/>[[Tax Avoidance#Views of non-tax practitioners | Views of non-tax practitioners]]<br/>
 |-
 | style="vertical-align: top;" |    Inter-spouse transfer to equalise income || style="vertical-align: top;" |   [[Tax Avoidance#Views of non-tax practitioners | Views of non-tax practitioners]]

@@ Line 431: / Line 431: @@
 Parliament sometimes admits this, by enacting a new relief to allow directly what had previously been achieved by avoidance.  Examples are:
-(a)   Nil rate band discretionary trusts, which allowed transferable nil rate bands before the IHT relief was enacted in 2007.
+(a)   Nil rate band discretionary trusts, which allowed transferable nil rate bands before the IHT relief was enacted in 2007.<br/>
-−
 (b)   CGT group relief to obtain loss relief.  A company about to realise a gain on an asset would formerly transfer it to a group company that had realised an allowable loss. Alternatively, a company which had realised a gain might acquire from a group company an asset which was to be sold at a loss.  That would allow the loss to be set against the gain before the introduction of group loss elections, in 2009.<ref>Section 171A TCGA.</ref>

@@ Line 970: / Line 970: @@
 | scope="row" colspan="3" style="text-align:left;"| <i>Retrospective reversal of avoidance schemes:</i>
 |-
-|    DT relief for partnership || 1987 || [[Partnerships#DT relief: Partnership | DT relief: Partnership]]
+|    DT relief for partnership || 1987 || [[Partnership Tax: Introduction#DT relief: Partnership | DT relief: Partnership]]
 |-
 |     s.23 FA 2012 (loan relationships) || 2012 || ''Not discussed''

@@ Line 517: / Line 517: @@
 See too ''Nourse v Heritage Trustees'' (Guernsey) 15 Jan 2015) at [15] and [71] accessible ''https://privateclienttax.co.uk/index.php/Case_Law_archive''</ref>  It may be that UK tax avoidance is regarded with less hostility in foreign jurisdictions, and especially tax haven jurisdictions.  Foreign courts may also be more sympathetic than UK courts to taxpayers facing unfair or penal anti-avoidance rules.<ref> See [[Appendix 19 Reform of Offshore Anti-Avoidance Law#Critique of s.87 regime | Critique of s.87 regime]]</ref>
-In practice, there has not yet been a case in the UK where a discretionary relief was actually refused on the grounds of avoidance, though here have been some where this has been mooted.<ref>See ''Bhaur v Equity First Trustees'' [2023] EWCA Civ 534  at [75].</ref>   I do not attempt to discuss all the cases where this point has been discussed, but only to assess (if one can) which way the wind is blowing.
+In practice, there has not yet been a case in the UK where a discretionary relief was actually refused on the grounds of avoidance, though there have been some where this has been mooted.<ref>See ''Bhaur v Equity First Trustees'' [2023] EWCA Civ 534  at [75].</ref>   I do not attempt to discuss all the cases where this point has been discussed, but only to assess (if one can) which way the wind is blowing.
 ''Estera Trust (Jersey) v Singh''<ref>[2019] EWHC 2039 (Ch).</ref> was an unfair prejudice case.  The unfairly prejudiced shareholder was a non-resident trust.  The Court ordered the company (“the defendant co”) to purchase the trust's shares.  Unfortunately that would be a distribution for tax purposes, and subject to IT at the dividend trust rate.  The trust proposed a different arrangement:
@@ Line 643: / Line 643: @@
 But in practice discussion is invested with indignation and hatred for those who benefit from or support perceived injustices.  This is fed by a sense of superiority that we are not like these accomplices of evil.  The result is moral panic, contempt and aggression.<ref>This is a danger to which any discussion of morality is subject: see Taylor, <i>A Secular Age</i> (2007) chapter 18.</ref>  There is a great and easily mobilised hostility to anything that can be represented as avoidance.   The remedies proposed become ever more penal and more discretionary.
-The debate sometimes suffers from profound bad faith or hypocrisy.  Politicians accuse others of tax-immorality in order to attack their opponents.   Or journalists do so to sell papers. A example is when the archive of Tony Benn was transferred to the British Library, under the acceptance in lieu scheme, which one might have thought as innocuous as any transaction could possibly be.<ref>Reported by the Telegraph (4 Mar 2019) under the snide headline “Tories praise Tony Benn's financial planning as donation of his archive knocks £210,000 off family's tax bill”.  The article shows some signs of a libel reader's scrutiny, as it falls just short of an allegation of hypocrisy.</ref>
+The debate sometimes suffers from profound bad faith or hypocrisy.  Politicians accuse others of tax-immorality in order to attack their opponents.   Or journalists do so to sell papers. An  example is when the archive of Tony Benn was transferred to the British Library, under the acceptance in lieu scheme, which one might have thought as innocuous as any transaction could possibly be.<ref>Reported by the Telegraph (4 Mar 2019) under the snide headline “Tories praise Tony Benn's financial planning as donation of his archive knocks £210,000 off family's tax bill”.  The article shows some signs of a libel reader's scrutiny, as it falls just short of an allegation of hypocrisy.</ref>
 In 2021, it emerged that:
@@ Line 1,053: / Line 1,053: @@
 So public debate is not uninformed but misinformed.  It is a yeasty mingling of dimly understood facts with vague but deep impressions, and images, half real, half fantastic.  It has more than its fair share of misunderstanding and jejune polemics.
-In these circumstances, media shaming may easily lead away from the Rule of Law. In 2012, Starbucks paid £20m to HMRC following a threat to occupy its cafes.<ref>Ironically, the post-tax cost of the payment would have been diminished as it should in principle be deductible in computing taxable profits.</ref>  If one calls that payment "taxation" at all, it was certainly not taxation imposed by law.  A hostile commentator would call this taxation by mob rule.  Google and Amazon, who are  vulnerable to the same threat, have not had to pay similar sums. Perhaps the point was understood, as the campaign was not repeated.
+In these circumstances, media shaming may easily lead away from the Rule of Law. In 2012, Starbucks paid £20m to HMRC following a threat to occupy its cafes.<ref>Ironically, the post-tax cost of the payment would have been diminished as it should in principle be deductible in computing taxable profits.</ref>  If one calls that payment "taxation" at all, it was certainly not taxation imposed by law.  A hostile commentator would call this taxation by mob rule.  Google and Amazon, who are  not vulnerable to the same threat, have not had to pay similar sums. Perhaps the point was understood, as the campaign was not repeated.
 The reader may agree with the journalist Rachel Cooke: