The recent Upper Tribunal decision in Dunsby demonstrates a modern approach to both the dividend taxing provisions and the settlement provisions found in ITTOIA 2005. The economic recipient of a corporate distribution is taxable on a purposive basis; and the preparatory steps to establishing a settlement are relevant when they provide the economic logic for the settlement itself. The transfer of assets abroad provisions, which might have provided an easy answer to taxing the avoidance scheme user, here are merely a backstop but the tribunal’s application of the code should also not be overlooked.
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The recent Upper Tribunal decision in Dunsby demonstrates a modern approach to both the dividend taxing provisions and the settlement provisions found in ITTOIA 2005. The economic recipient of a corporate distribution is taxable on a purposive basis; and the preparatory steps to establishing a settlement are relevant when they provide the economic logic for the settlement itself. The transfer of assets abroad provisions, which might have provided an easy answer to taxing the avoidance scheme user, here are merely a backstop but the tribunal’s application of the code should also not be overlooked.
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