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Whose fiscal loss?
The taxpayer set up the company in 1984 in which he and his wife held about 60% of the shares. In 1997 an offer of £26 million was made for their shares most of which represented a potentially chargeable gain.
In order to reduce the capital gains tax bill MTM put in place a scheme for a fixed fee together with an additional fee of 2.5% of the tax resulting from the scheme. Under the scheme the taxpayer and his wife each set up an Isle of Man settlement. MTM were the trustees and acquired an off the shelf parent company and subsidiary company for each settlement. The taxpayer and his wife took out separate insurance bonds with Irish Life International Ltd and assigned the bonds to the subsidiary companies in the settlements. Irish acquired an off the shelf UK company within...
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