Victory for HMRC in BVI avoidance case

HMRC won before the First-tier Tribunal in J Myers v HMRC (and related appeals) (TC02703 – 17 May), a case involving a ‘highly complex’ tax avoidance scheme involving shares in a British Virgin Islands-based company, in which more than 400 wealthy individuals took part, according to the Financial Times. The paper reports that ‘the case was the third successive HMRC victory against tax avoidance schemes promoted by NT Advisors, a Jersey-based firm.’ In this case, the scheme involved the sale of shares to investors for millions of pounds more than they were worth.

When they were sold, it created ‘a massive paper loss – at no risk to the investor. In one case, more than £6m-worth of shares were sold for £552.’ HMRC’s legal win means that individuals taking part in the scheme face a bill of around £190m. Exchequer secretary to the Treasury, David Gauke, remarked: ‘This was a highly complex avoidance scheme that was not worth buying into. HMRC will always challenge schemes like this so not only will investors have to pay the tax they owe, they will also have to pay interest; all this on top of the promoter’s fees.’