Transfer of assets legislation applicable only to certain transfers

HMRC appealed again the decision of the Upper Tribunal that the transfer of a family-run betting business to Gibraltar was not caught by the transfer of assets abroad legislation in (what was at the time) TA 1988 s 739.

The background to the case was the move by a major betting company of its telephone bookmaking business to an operation in Gibraltar in order to avoid UK betting duty. This move in the words of the judge ‘caused shockwaves through the industry’ and within a short time all similar business including the one owned by the taxpayers in this appeal followed suit.

HMRC issues assessments under s 739 to the three UK resident shareholders on the basis that there had been a transfer of assets abroad and that the individuals had a power to enjoy the income from the business which had been transferred. The First-tier Tribunal...