Chappell – Court of Appeal of England and Wales finds that a provision intended to provide relief for “real world…commercial transactions” was not available in a purely tax-driven structure

Patten LJ applied the Ramsay doctrine and, in particular, how it was expressed in UBS, to find that a tax scheme, which depended on accessing relief for manufactured overseas dividends, failed given that such relief was only “intended to benefit the parties to real-world, commercial transactions involving the lending of marketable securities and not to transactions which lack those characteristics and whose only purpose is to obtain tax relief.” From a Canadian perspective, this might be articulated as giving greater weight to the “purposive” part of “textual, contextual and purposive” than would normally animate a Canadian decison (in the absence of GAAR).

Neal Armstrong. Summary of Chappell v Revenue and Customs Commissioners [2016] BTC 36, [2016] EWCA Civ 809 under General Concepts – Tax Avoidance.