A Chappell v HMRC

In A Chappell v HMRC (TC02516 – 20 February) an individual (C) had entered into a complex avoidance scheme designed to obtain a tax deduction of more than £300 000 in respect of purported payments of ‘manufactured overseas dividends’ which he claimed to have made to a company (B). HMRC rejected the claim and the First-tier Tribunal dismissed C’s appeal applying the principles laid down in Moodie v CIR & Sinnett ([1993] STC 188) and WT Ramsay Ltd v CIR ([1981] STC 174). Judge Walters observed that the various transactions which had taken place within a few days were self-cancelling and held that they were ‘artificial steps which should be ignored’. Furthermore applying the CA decision in the 1919 case of Earl Howe v CIR...