- April 25, 2019
- Posted by: Stephen Coleclough
- Category: Tax
This case had a normal pre-sale reorganisation, a sale of “shares” (see s.75C(1) FA 2003 – as the judge found this as the first step then surely it should be disregarded?) and a normal post sale reorganisation driven by German regulatory requirements. Any advised Vendor would do a bona fide pre-sale reorg. Any advised purchaser will investigate how and what to buy.
This is the nature of a global economy and many complex tax issues, and marrying the two together is a challenge many international businesses face. A bog standard, if complex, international real estate deal. It is normal international business.
Except Parliament has given HMRC unlimited powers to pick on any transaction and re-draw it at will, regardless of regulatory and tax laws of any other country on the planet.
Is buying the shares instead of the asset now within s.75A ? (rhetorical at this stage but one for you to think about).
How are these steps within Barclays Mercantile? They are not – tons of commercial purposes, unlike in Project Blue.
Learning point – this case shows a need to be smarter with steps plans. At ExCapsa and Caesium International we always cover Furniss, GAAR, relevant TAARs, DOTAS and therefore APNs etc and any “future” plan is one of a number of viable options.
I believe this case will go, ultimately, to the Court of Appeal, perhaps by way of a leap frog appeal.
Hannover – s.75A FA 2003
- LP distributes property to JPUT.
- Agreement to sell units in JPUT (should have been disregarded – s.75C(1)) owning 30 Cannon Street directly.
- JPUT amended to permit in specie distribution.
- 30CS distributed to the 2 Hannover unit holders (actually partners in a LP).