In Dukeries Healthcare Ltd v Bay Trust International and others [2021] EWHC 2086 (Ch) (23 July 2021) the High Court dismissed the appeal holding that the contributions to the trusts could not be set aside. The proceedings in the FTT to assess whether the tax avoidance scheme worked have been stayed pending the outcome of this case.
This is another example of trend we have seen recently under which taxpayers seek to avoid the adverse tax consequences of the failure (or potential failure) of tax planning arrangements which they have implemented by arguing that they should be set aside on ground of mistake. Here the company had set up a complex trust arrangement which HMRC argued created various tax liabilities. Furthermore it appeared that the drafting of the trust had the effect of removing the company’s owner and his family from any benefit from the trust funds. That was never...
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