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Private client review for March 2022

Several recent case decisions in the private client arena, including the correct interpretation of the ‘place of effective management’ tie-breaker test, are examined by Edward Reed and Ross Pizzuti-Davidson (Macfarlanes).

Trustee place of effective management: around the world we go!

The recent decision in Haworth v HMRC [2022] UKFTT 34 (TC) provides useful judicial commentary on the correct interpretation of the ‘place of effective management’ (POEM) tie-breaker test for corporate trustees in the context of a ‘round the world’ scheme.

The trustees of a family trust held shares in a UK company that was soon to be listed during the peak of the ‘dot-com bubble’ in 2000. In an attempt to escape UK CGT on the disposal of these shares a scheme was designed (essentially by UK advisers) to exploit the tie-breaker test under the UK/Mauritius double tax treaty. In very simple terms this involved the...

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