Blumenthal: QCBs and the Ramsay principle

The tribunal decision in William Blumenthal v HMRC [2012) UKFTT 497 (TC) gives us comfort that the common approach of using an appropriately worded foreign currency conversion clause can make a loan note a non-QCB. The case demonstrates how commercial concepts can be more susceptible to the Ramsay doctrine than technical legal concepts, and how the tribunal will be extremely reluctant to use doctrines of interpretation to ‘fix’ tax avoidance structures which have not been properly implemented. The tribunal also considered how much disclosure is needed on a tax return to prevent a discovery assessment.