InA Chappell v HMRC[2016] EWCA Civ 809 (4 August 2016) the Court of Appeal found that payments made as part of a tax avoidance scheme were not deductible manufactured overseas dividends (MODs).
Mr Chappell had made two payments to a company which he claimed were MODs (ICTA 1988 Sch 23A) and therefore annual payments (ICTA 1988 s 349(1) and the Income Tax (Manufactured Overseas Dividends) Regulations 1993/2004 reg 2B) deductible in full from his total income. HMRC contended however that the payments had been made as part of an avoidance scheme and as such were not deductible under the Ramsay principle.
The scheme worked as follows. Mr Chappell borrowed loan notes on which he received interest. He then sold the loan notes and subsequently received two payments of interest which he forwarded to the...
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InA Chappell v HMRC[2016] EWCA Civ 809 (4 August 2016) the Court of Appeal found that payments made as part of a tax avoidance scheme were not deductible manufactured overseas dividends (MODs).
Mr Chappell had made two payments to a company which he claimed were MODs (ICTA 1988 Sch 23A) and therefore annual payments (ICTA 1988 s 349(1) and the Income Tax (Manufactured Overseas Dividends) Regulations 1993/2004 reg 2B) deductible in full from his total income. HMRC contended however that the payments had been made as part of an avoidance scheme and as such were not deductible under the Ramsay principle.
The scheme worked as follows. Mr Chappell borrowed loan notes on which he received interest. He then sold the loan notes and subsequently received two payments of interest which he forwarded to the...
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