Lloyds Bank decisions suggest that structured transactions have tax reductions as one of their main objects

In IRC v Brebner (1967), 43 TC 705 (HL), Lord Upjohn stated:

"... when the question of carrying out a genuine commercial transaction ... is considered, the fact that there are two ways of carrying it out—one by paying the maximum amount of tax, the other by paying no, or much less, tax—it would be quite wrong as a necessary consequence to draw the inference that in adopting the latter course one of the main objects is ... avoidance of tax.

Following the Lloyds Bank decisions ([2014] EWCA Civ 1062, remitted to [2015] UKFTT 401) dealing with an anti-avoidance provision which was engaged if the obtaining of a writing-down allowance of 25% was “one of the main objects" of ship-leasing transactions, a U.K. writer has inferred that

the courts have now made it difficult for taxpayers to show that tax is not "a main object/purpose" in any situation where they have taken tax advice, and elected to adopt a more rather than less tax-efficient structure for a commercial transaction.

Neal Armstrong. Summaries of Michael McGowan, "HMRC v Lloyds Bank Leasing (No 1) Ltd: the troublesome increase in the scope of the "sole or main object" test", [2015] British Tax Review (Thomson Reuters (Professional) UK Limited), 2015, No. 5, p. 649 under General Concepts – Intention and s. 83(2.1).