Readers know that all statutes must be construed purposively: you must have regard to the purpose of the relevant provision and interpret its language so far as possible in a way which best gives effect to that purpose.
Readers also know that the ‘Ramsay principle’ says that the meaning which best gives effect to the purpose of a tax statute is often a wide practical meaning.
The principle is encapsulated in the often-quoted statement that ‘the ultimate question is whether the relevant statutory provision construed purposively is intended to apply to the transaction viewed realistically.’
That is to view a transaction ‘realistically’ is simply to adopt a wide practical...
