A tax avoidance scheme sold by NT Advisors has lost its third bid for legitimacy, saving £100m in lost tax according to HMRC.

Matthew Jenner devised the complex scheme, branded Project Corbiere, for NT Advisors and pitched it to wealthy individuals. It involved transferring millions of pounds of UK government bonds, or gilts, backwards and forwards to the British Virgin Islands.

The scheme sought to exploit the fact that tax legislation offers two separate reliefs in some circumstances where securities are transferred. The first relief is an 'accrued interest' relief, and the second is a 'manufactured interest' relief. NT Advisors sought to design a transaction that would make them both applicable, so as to allow the taxpayer to have one obligation to pay out for the gilts purchase, but two reliefs against that obligation in order to manufacture an unwarranted tax deduction.

The Court of Appeal judgement handed down last week concerned a case involving Nicholas Barnes whose participation in the Corbiere Scheme entitled him to a net income tax deduction of some £1.2m against his other income for the tax year 2004-2005. In its ruling the Court of Appeal said the scheme was specifically designed to avoid tax.

Eighteen of the 230 wealthy individuals, who first used the scheme in 2005, have settled their tax bills with HMRC, but about £80m could have been lost had this latest appeal been successful. The First-tier and Upper Tribunals and the Court of Appeal have all now ruled in HMRC's favour.

Exchequer Secretary to the Treasury, David Gauke, said: 'This is an important win for HMRC and is the latest in a string of successes. Many users of this scheme have already accepted the inevitable and settled up with HMRC and those who haven't should do so quickly.'

The judgement in Nicholas Barnes v Revenue and Customs [2014] EWCA Civ 31 can be read HERE