Dos and don’ts for advisers when tax planning for their clients

The subject of tax avoidance is one very much in the minds of both the lay public and politicians. The mantra these days is that everyone should pay their ‘fair share’ of tax and those who practise tax avoidance are looked at askance. It certainly never used to be this way.

In the ‘good old days’: the Duke of Westminster

Back in 1936 we had the case of the Duke of Westminster v CIR (1936) 19 TC 490. The duke entered into a covenant with an employee to pay him a fixed sum of £1.90 a week for his services. The employee was told that he was legally entitled to £3 a week but that in reality he could expect to take home a residuary sum of £1.10.

This meant that pursuant to the legally binding covenant the duke was entitled to deduct...