Avoidance scheme using settlements legislation failed
In Dunsby v HMRC [2020] UKFTT 0271 (TC) (24 June) the FTT held that a marketed scheme known as ‘Project Scimitar’ which was designed to allow shareholders to receive those profits from a company free of income tax did not work. The appeal was the lead case in relation to the scheme.
The taxpayer (D) was the sole shareholder and director of M Ltd. In 2013 he and the company implemented the scheme using generic documents provided by the promoter. The company issued a single share in a new class (the ‘S’ share) to an unconnected individual G resident outside the UK. The S share carried a right to dividends but no other rights. G who undertook the same role in the scheme for other users then created a trust in Jersey and transferred the S share...
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Avoidance scheme using settlements legislation failed
In Dunsby v HMRC [2020] UKFTT 0271 (TC) (24 June) the FTT held that a marketed scheme known as ‘Project Scimitar’ which was designed to allow shareholders to receive those profits from a company free of income tax did not work. The appeal was the lead case in relation to the scheme.
The taxpayer (D) was the sole shareholder and director of M Ltd. In 2013 he and the company implemented the scheme using generic documents provided by the promoter. The company issued a single share in a new class (the ‘S’ share) to an unconnected individual G resident outside the UK. The S share carried a right to dividends but no other rights. G who undertook the same role in the scheme for other users then created a trust in Jersey and transferred the S share...
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