The taxpayers had adopted the ‘flip-flop’ scheme to reduce their Capital Gains Tax liability.
Held: The section was intended to prevent relief where the settlor retained some direct or indirect benefit. Derived property was defined to include income from settled property, and that could include property outside the settlement if there was also property within the settlement of which it could be said to represent the proceeds. Loans in this scheme were indirectly derived form the utilisation of the shares within the settlement, and the scheme failed.
Judges:
The Honourable Mr Justice Peter Smith
Citations:
[2003] WTLR 739, Times 18-Apr-2003, Gazette 12-Jun-2003, [2003] STC 580, [2003] EWHC 676 (Ch), [2003] STI 585, [2003] BTC 317
Links:
Statutes:
Taxation of Chargeable Gains Act 1992 77
Jurisdiction:
England and Wales
Cited by:
Appeal from – Trennery v West (HM Inspector of Taxes) and Related Appeals CA 18-Dec-2003
. .
At first instance – Trennery v West (Inspector of Taxes) HL 27-Jan-2005
The House considered the application of the section to ‘flip-flop trusts’. The section allocated liability to charge on gains within a settlement under certain circumstances onto the settlor, and at his rate of tax. Assets were allocated to two . .
Lists of cited by and citing cases may be incomplete.
Capital Gains Tax, Trusts
Updated: 05 October 2022; Ref: scu.180461