Unrealistic possibilities

Sham or Ramsay? HMRC is seeking leave to appeal against the FTT’s decision in the Rangers EBT case (Murray Group Holdings Ltd v HMRC [2012] UKFTT 692 (TC)) encouraged no doubt by the powerful dissenting judgment of Dr Heidi Poon. It is not my purpose to speculate whether her opinion will prevail but to deplore her inappropriate use of the Ramsay principle to disregard unrealistic possibilities which (on her findings of fact) are sham. That is the role of the sham doctrine.

Ramsay is a principle of statutory construction. It is therefore appropriate to invoke Ramsay where the statute requires an approach to the facts which disregards events that did not occur and were never going to occur. So where shares in a Hong Kong property company had dividend rights only if...