Meeting Points

The motive defence
Giles Clarke MA PhD FTII of Rathbone Life & Pensions considered that the motive defence to which sections 739 and 740 Taxes Act 1988 are subject may now be wider than was once thought. The cases of Commissioners of Inland Revenue v Willoughby [1997] STC 995 A Beneficiary v Commissioners of Inland Revenue [1999] STC (SCD) 134 and Carvill v Commissioners of Inland Revenue [2000] STC (SCD) 143 support the proposition that if the settlement (and any associated operations) are tax mitigation rather than tax avoidance the defence should apply. Nevertheless if the recipient of funds is resident and domiciled in the United Kingdom capital payments will still be subject to capital gains tax under the section 87 charge. This is so even if the settlement has had no previous connection with the United Kingdom....