While the appellant did not dispute that some tax was payable, at the First Tier Tribunal (FTT) Alastair Cattrell argued that he had never received correspondence from HMRC that he was subject to a notice of enquiry and did not accept that the PwC gilt strip scheme was ‘ineffective for tax purposes’.

The tax avoidance scheme at the centre of this case dated back to the early 2000s when Big Four firm PwC promoted a scheme involving gilt strips, which were divided parts of a UK government bond. ‘Strips’ was an acronym for ‘separately traded and registered interest and principal securities’.

After examining the PwC scheme which ran in 2003-04, HMRC decided that these investments were ‘tax avoidance transactions’.

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