The Ramsay principle - an inconclusive case for defence

In the early 1970s the UK's punitive levels of taxation lead to the development of tax planning schemes, which set in motion a series of transactions that helped save tax without affecting the economic position of the taxpayer. Firstly, there was a scheme or plan to avoid the payment of tax otherwise payable. Secondly, the scheme included artificial steps for which there was no commercial justification. Thirdly, if each artificial step was considered in isolation, the tax liability had been expunged, but if the scheme was regarded as a whole, the liability had only been disguised. The...