Can avoidance become evasion?

The claimants used loan agreements to reduce their tax liability. After the introduction of the loan charge in 2016 they recharacterised the payments as fiduciary receipts agreements (FRAs) saying they had received payments in a fiduciary capacity and this had always been the position so they were not within the new charge. They also introduced the scheme to clients.

After a civil enquiry HMRC began a criminal investigation into the claimants and applied for search and seizure warrants under Police and Criminal Evidence Act 1984 Sch 1. The Leeds crown court granted the applications. HMRC executed the warrants and arrested and interviewed the claimants. The latter applied for judicial review of the lawfulness of the issue of the warrants. They claimed there was no indictable offence; the arrangements were lawful tax avoidance and not evasion and there were no reasonable grounds for believing they had...