Morrison 2002 Maintenance Trust – Court of Appeal of England and Wales finds that identifying the form of ultimate sale was not essential to finding a pre-ordained series

Three “Scottish Trusts” exercised their put to sell shares of a listed public company to trusts (the “Irish Trusts”) with similar terms for the shares’ cost base of £4.5M; and the Irish Trusts sold the same shares eight days later to Merrill Lynch for £14.3M, who then sold the shares into the market. Newey LJ confirmed the findings below that the put exercise and subsequent sale were a "pre-ordained series of transactions" (a.k.a., a "single composite transaction") under the Ramsay doctrine so that the transactions were to be treated for U.K. capital gains purposes as if the Scottish Trusts had disposed of their shares for £14.3M.

The Scottish Trusts submitted inter alia that it was significant that at the time of exercise of the put, it was contemplated that the Irish Trusts would on-sell their shares into the market (through the agency of Merrill Lynch), whereas in fact the shares were sold to Merrill Lynch as principal for what effectively was a partially underwritten price. Newey LJ stated that he agreed with the First-tier Tribunal:

that the sale to Merrill Lynch "sufficiently corresponded to the scheme as planned" and … it "would be extraordinary if the application of the Ramsay approach could be defeated by the sale being to brokers rather than to the market by brokers on behalf of the Irish Trustees" … .

The identification of a so-called “common law” series of transactions is still relevant under the ITA since, in order for an extended series to be deemed to exist under s. 248(10), there first must be the identification of a common law series to which “in contemplation of” transactions can be assimilated.

Neal Armstrong. Summary of The Trustees of the Morrison 2002 Maintenance Trust & Ors v Revenue and Customs [2019] EWCA Civ 93 under s. 248(10).