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The implications of the Supreme Court judgment in HMRC v TowerMCashback LLP are examined by MIKE TRUMAN
KEY POINTS
- Tower MCashback [2011] UKSC 19 decided in favour of HMRC.
- Importance of the facts: a mix of commerciality and artificiality.
- Ensign Tankers and BMBF are both still good law.
- Is this the best way to deal with tax avoidance or would a GAAR be better?
The Special Commissioner hearing the Tower MCashback case said that part of the complex structure of the transaction was ‘window dressing’ designed to obscure exactly what had happened to the funds raised as loan capital.
Perhaps they should have paid more rather than less attention to appearances because if you are going to try and polish up a tax avoidance scheme to make it look better the first thing you should look at...
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