HMRC v Smallwood

Avoidance scheme: whether trust resident in the UK

In HMRC v Smallwood (CA – 8 July) an individual (S) had established a trust over which he had the power to appoint new trustees in 1989. The trust assets included shares which had increased in value. From 1994 to December 2000 a Jersey company acted as the trustee. In December 2000 S appointed a Mauritius company as the new trustee. In January 2001 the trustees sold the shares realising a substantial gain. In March 2001 S appointed himself and his wife (both resident in the UK) as trustees.