On the application of the ‘Ramsay’ principle of statutory interpretation, guaranteed licence fees receivable as part of a circular financing arrangement entered into by a partnership as part of a tax-driven financing scheme were not ‘income’ for tax purposes. 

Summary 

On the application of the ‘Ramsay’ principle of statutory interpretation, guaranteed licence fees receivable as part of a circular financing arrangement entered into by a partnership as part of a tax driven financing scheme were not ‘income’ for the purpose of statutory provisions, so neither ITTOIA 2005, s 683 nor s 687 was engaged. 

Background 

A complex arrangement (the scheme) was entered into under which the appellant partnership was intended to secure for the individual partners (of whom the individual appellant was one) a loss for income tax purposes.