The Court of Appeal allowed the taxpayer’s appeal and quashed a follower notice and accelerated payment notice, as HMRC misdirected themselves in certain respects when deciding to give him the follower notice. 

In early 2000, a trust established by the taxpayer for the benefit of himself and his family held shares in a company. A plan developed to merge the company with another company and to list shares in the new company on the London stock exchange. 

To avoid capital gains tax on disposal of the shares held by the trustees, a scheme was devised pursuant to which the existing Jersey trustees resigned in favour of trustees resident in Mauritius. The Mauritian trustees became shareholders in the new company. The new company was floated in August 2000, and all the shares that the trust held in the company were sold in the course of the floatation. Subsequently, UK