04 July 2024

Misunderstanding purpose in Osmond & Allen

The recent FTT decision in Osmond and Allen is somewhat surprising as Thomas Chacko explains in his article in Tax Journal.

The FTT dismissed the taxpayer’s appeal in relation to the Transactions in Securities charge, finding a main purpose of obtaining an income tax advantage even though they were trying to avoid paying CGT. This misunderstands the test and is an example of a mistaken approach to anti-avoidance provisions seen in other cases. HMRC sometimes seek to avoid the factual difficulties with subjective purpose tests by arguing that a transaction fails them as a matter of definition, but this misunderstands how anti-avoidance provisions relate to the underlying tax legislation. The decision should hopefully be overturned.

If you would like further information about Thomas Chacko’s practice or Pump Court Tax Chambers’ work in this area, please contact John Poyser.

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