The appellants were unable to rely on the ‘motive test’ exemption or double taxation treaty relief from liability under the transfer of assets abroad anti-avoidance provisions. 

In November 2002, a non-UK resident company (SAP) entered into an agreement to purchase the bulk of a property. Up to that point, SAP had only undertaken property investment. However, the purchase of the property would have resulted in SAP coming within the UK tax net and would have ‘tainted’ the structure of which it formed part.  

Following professional advice: (1) A company (ABP) was incorporated in Mauritius; (2) ABP purchased the property instead of SAP and undertook the development; (3) The appellants each took out a life policy with Credit Suisse Life & Pensions (Bermuda) Ltd (CSLP),