This month's review of tax cases and tax news including Mauritian trust management UK based, Icebreaker members’ appeal dismissed, appeal against penalties denied and, Making Tax Digital dropped from Finance Bill 2017
Case: Mauritian trust’s management UK based
In Lee & Anor v Revenue and Customs [2017] UKFTT 279, Richard Lee and Nigel Bunter (the appellants) took part in a scheme which involved assets held in an offshore trust with gains which were migrated to a low tax or no tax jurisdiction. In this case, the trust used Mauritius, where the UK has a double taxation arrangement, the UK-Mauritius double taxation convention.
The appellants believed the effect of the double taxation convention was to confer the right to charge capital gains tax (CGT) in Mauritius alone. Mauritius does not levy CGT on the type of gain generated from this scheme. The trust is then subsequently transferred to the UK where, if the scheme works as intended, the proceeds of sale can be enjoyed without UK taxation imposed.
