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Settlement tax planning arrangement

23 July 2020
Issue: 4754 / Categories: Tax cases
M Dunsby (TC7755)

The taxpayer was the sole shareholder and director of M Ltd. In 2013 he and the company implemented a tax planning arrangement using generic documents provided by the scheme promoter. Under the scheme M Ltd created a new class of S shares and issued one S share to a non-resident individual G. That person created a trust in Jersey in which they retained an interest but in which the taxpayer had an immediate right to most of the income of the trust for an initial period. During that period M Ltd declared a dividend of £200 000 in respect of the S share and the taxpayer received £195 000. He disclosed the scheme in his tax return but did not include the income from the dividend received on the basis that under the settlements legislation (ITTOIA 2005 part 5 chapter 5) it was G’s...

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