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Haworth and others v HMRC

Round the world scheme fails

In G Haworth and others v HMRC [2022] UKFTT 34 (TC) (2 February 2022) the First-tier Tribunal (FTT) decided that a ‘round the world’ tax scheme failed to exploit the residence tie breaker provision in the UK/Mauritius double tax treaty (DTT) to allow capital gains realised on share disposals by trusts to escape tax. 

The FTT had to consider the tie breaker in the UK/Mauritius DTT to determine where the trusts were resident because although the trusts were for a short period during which the share disposal occurred resident in Mauritius the trusts were also resident in the UK during the tax year in which the disposal occurred. This was because the Mauritius resident trustees were replaced with UK tax resident trustees shortly after the share disposal but still within the same tax year as the disposal. In considering the tie...

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