36 Queen Street, London, EC4R 1BN | +44 (0)20 7242 2642
IRC v. Willoughby [1997] STC 995 (H.L.)

Tax avoidance through the transfer of assets abroad. Sections 739 and 741 ICTA 1988.(1) On the natural meaning of the words used in s.739 the section applies only to transfers of assets by individuals who are ordinarily resident in the U.K. at the time of the transfer.(2) The difference between tax avoidance and tax mitigation: in tax mitigation, the taxpayer takes advantage of a fiscally attractive option afforded by the legislation and genuinely suffers the economic consequences that Parliament intended to be suffered by those taking advantage of the option; in tax avoidance, the favourable tax regime is enjoyed but the economic consequences are not incurred.Here, there was investment in qualifying policies issued by non-resident life offices (Sch. 15 ICTA 1988 Рformerly Sch.2 FA 1975): a special factor here was that the policy-holder could manage his own ‚Äúportfolio‚Äù of investments. Although investment units were notionally allocated to him, he had no legal or equitable interest in the underlying investments, but simply a contractual right to the benefits promised by the policy Рhe was still suffering the economic consequences intended by Parliament. Thus there was no tax avoidance Рhe was within the s.741 exemption.David Goy KC and Philip Baker appeared for the taxpayerSee also Article by David Goy Q.C. and Philip Baker

Latest news:

Gray’s Inn Tax Chambers is delighted to announce that Nicholas Macklam has joined Chambers.
18 Jun 2024
Tolleys Taxation Awards 2024
We are pleased to announce that we have won the Tolleys Taxation Awards 2024 for Tax Chambers of the Year.
28 May 2024
GITC Review
The 2022 GITC Review is now available
If you would like to be added to the mailing list for future issues of the GITC Review, please send an email to Jane.Fullbrook@taxbar.com.
Read review