Significance of the word ‘would’ in the follower notice legislation

The taxpayer was the settlor and a beneficiary of a trust that had been issued a follower notice and an accelerated payment notice in relation to gains made on the disposal of assets. He argued that the gains were exempt from UK capital gains tax under the UK/Mauritius double tax treaty. This was on the basis that the gains had been realised after trustees resident in Mauritius had replaced those in Jersey. HMRC decided the taxpayer had implemented a tax avoidance arrangement known as ‘round the world’ which had been ruled ineffective in Smallwood v CRC [2010] STC 2045. In particular HMRC said that Smallwood established that on the true construction of the tax treaty the place of effective management of the trust was in the UK at the time of the disposal and therefore the taxpayer was liable to...