Re McGuckian (No 1)
Jurisdiction | Northern Ireland |
Judgment Date | 01 January 1994 |
Date | 01 January 1994 |
Court | Court of Appeal (Northern Ireland) |
- Statute - Interpretation - Transfer of assets abroad - Power to enjoy income of person resident or domiciled out of United Kingdom -Income - Taxpayer transferring shares to non-resident settlement of which taxpayer beneficiary - Taxpayer ordinarily resident in United Kingdom - Assignment by non-resident trustee of right to dividend for consideration paid out of dividend - Whether trustee received capital or income - Income and Corporation Taxes Act, 1970, s. 478.
From the date of its incorporation in the Republic of Ireland in 1972 up to 1977, all the issued share capital of B. Ltd. was held by the taxpayer and his wife who were resident and ordinarily resident in the United Kingdom. B. Ltd. had made profits and accumulated reserves, which were available for distribution as dividend. In 1977, the taxpayer and his wife, acting on the advice of a tax consultant, adopted a scheme involving three principal features: (i) the payment of large sums by way of dividend to the shareholders of B. Ltd.; (ii) the setting up of a trust under which the shares in B. Ltd. would be held for the benefit of the taxpayer and his wife by trustees resident out of the jurisdiction; and (iii) the sale by the trustees of their rights to dividends expected to be declared and paid by B. Ltd. to a person resident in the United Kingdom. By those means the assets held by B. Ltd. and the value of its shares would be reduced minimising the taxpayer's exposure to any wealth tax which might be introduced, while liability to income tax on dividends paid out by B. Ltd. would be avoided as the proceeds would be received in the form of capital rather than income payments. Accordingly, the taxpayer and his wife transferred their shares in B. Ltd. to a non-resident settlement, the trustee of which was a Guernsey-resident company. The beneficiaries were the taxpayer and his wife and the income was payable to the taxpayer's wife. In November, 1979, B. Ltd. had income available for distribution amounting to Ir£400.055. On 23 November, 1979, the trustee assigned the right to any dividend payable by B. Ltd. in 1979 to M. Ltd., a United Kingdom-resident company associated with the tax consultant, for Ir£396,054. On 27 November, 1979, B. Ltd. declared a dividend of Ir£400,055 and gave a cheque for that amount to a solicitor for M. Ltd. The solicitor paid the cheque into his client account out of which he then paid 99% of that sum...
To continue reading
Request your trial-
Sword Services Ltd and Others v Revenue and Customs Commissioners
... ... Mawson (Inspector of Taxes) [2004] UKHL 51 , [2005] 1 AC 684 , [28]–[29], per Lord Nicholls, referring to Inland Revenue Commissioners v. McGuckian [1997] 1 WLR 991 HL(NI) and Ramsay (W T) Ltd v. Inland Revenue Commissioners [1982] AC 300 ... 60 In ordinary parlance the terms "partnership" and "partners" cover both general and limited liability partnerships and their members. There is no reason that this ... ...
-
Transport for London v Spirerose Ltd ((in Administration))
... ... The principal authorities, well known to tax practitioners, are WT Ramsay Ltd v IRC [1982] AC 300 , Furniss v Dawson [1984] AC 474 , IRC v McGuckian [1997] 1 WLR 991 (especially Lord Browne-Wilkinson at p 998, Lord Steyn at pp 999-1000 and Lord Cooke at p 1005) and MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311 (especially Lord Nicholls at paras 1-8 and Lord Hoffmann at paras 28-32). To these I would add a short passage, less ... ...
-
Grimm v Newman and Another
... ... Lord Nicholls himself arrived at his conclusion via a "road to Damascus" (para 13). A careful tax adviser today would need to keep in mind the statements of Lord Steyn and Lord Cooke in McGuckian v Commissioners of Inland Revenue (1997) 69 TC 1 , 80, 85), about the open-ended nature of the journey. It might be a mistake to regard MacNiven as representing the last word ... 104 More significantly, as the Vice-Chancellor observes, we are concerned with the ... ...
-
R CXF (acting by his mother and litigation friend) v (1) Central Bedfordshire Council
... ... He showed that the modern emphasis is on a contextual approach designed to identify and give effect to the purpose of the statute: see e.g. Inland Revenue Commissioners v McGuckian [1997] 1 WLR 991, 999 (Lord Steyn); R v Secretary of State for the Environment, Transport and the Regions, ex parte Spath Holme Ltd [2001] 2 AC 349, 397 (Lord Nicholls); R v (Quintavalle) Secretary of State for Health [2003] UKHL 13 ; [2003] 2 AC 687 , paras 8 (Lord Bingham) and 21 ... ...
-
Gas (Northern Ireland) Order 1996
...(24) 1984 c. 12. (25) 1986 c. 31. (26) 1986 c. 44. (27) 1987 NI 5. (28) 1987 NI 20. (29) 1989 c. 29. (30) 1991 c. 56. (31) 1992 NI 1. (32) 1994 NI 1. (33) 1988 c. 1. (34) 1991 NI 11. (35) 1954 c. 33 (N.I.). (36) 1991 NI 11. (37) 1982 NI 9. (38) 1979 NI 12 (39) 1954 c. 33 (N.I.). (40) 1954 c......
-
Employment Rights (Northern Ireland) Order 1996
...(48) 1989 NI 19. (49) 1989 NI 19. (50) 1986 NI 6. (51) 1980 c. 9. (52) 1955 c. 18. (53) 1955 c. 19. (54) 1957 c. 53. (55) 1994 c. 33. (56) 1994 NI 1. (57) 1996 (58) SR 1983 No. 282. (59) SR 1995 No. 46. (60) SR 1995 No. 417.
- Trade Union and Labour Relations (Northern Ireland) Order 1995
...to the agreement. (4) The conditions regulating compromise agreements under this Order are that -(a) the agreement must be in writing;(a) 1994 NI 1(b) the agreement must relate to the particular complaint;(c) the complainant must have received independent legal advice from a qualified lawye...... - Trade Union and Labour Relations (Northern Ireland) Order 1995