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Savva and others (TC2625)
The taxpayer agreed in 2004 to participate in an avoidance scheme, STICS, marketed by UBS Wealth Management. He bought a number of corporate bonds that had been stripped of interest. He sold them 15 months later.
HMRC said the profits arose from the disposal of deeply discounted securities within ITTOIA 2005, s 427(1) and were subject to income tax.
The First-tier Tribunal agreed that the STICS securities were extremely discounted and had been issued as such. The profits were therefore taxable.
The taxpayer’s appeal was dismissed.
The decision is akin to the one in M Healey (TC2591). The Revenue has pledged to seek “full payment of the tax due plus interest from the small number of users who have yet to concede” in similar cases.
