Reversing a transaction based on mistake

KEY POINTS

• Shares transferred to remuneration trusts in Guernsey.
• The trusts had been set up in the UK so assumed tax advantages would not arise.
• Potentially the transfers would result in higher UK tax liabilities.
• An application was made to set aside the transfers.
• The tests set out in Pitt v Holt were applied.
• Whether the transactions were for ‘artificial tax avoidance’ or ‘legitimate tax planning’ could affect the decision to set aside a transaction.
• The Court held that the transaction could be set aside.

Margaret Whittaker is the founder of Slimming World. In November 2008 she transferred shares in five UK companies into remuneration trusts in Guernsey. However the trust companies had been incorporated in England. These transfers were made in...