Summary
The consideration for assets in an artificial scheme to create an allowable loss was not ‘wholly and exclusively’ given for the acquisition of the assets (within TCGA 1992, s 38(1)(a)), on the basis of the Ramsay approach to the application of the tax legislation to transactions forming part of a larger whole.
Background
The appellants entered into an artificial tax avoidance scheme, which was designed to create capital losses that could be offset against taxable income.
The scheme was complex, but in essence its success depended on the participants having spent large sums on acquiring assets, and realising very small disposal proceeds, thereby generating a large loss for capital gains tax purposes. For example, one appellant (M) claimed to have spent over £6 million on acquiring certain shares pursuant to an option. The shares, which
