Ramsay, purposive construction and the Astall case

Matthew Mortimer, Milbank, Tweed, Hadley & McCloy LLP

The recent Astall case offers an illuminating insight into the continuing breadth of the Ramsay principle, as Matthew Mortimer explains.

Introduction

Astall [1] is a recent case that was originally heard by Special Commissioner John F Avery Jones in August 2007. It has now been appealed to Mr Justice Peter Smith in the High Court. The case involved a series of wholly tax-motivated transactions which were intended to generate relief for the taxpayers under the relevant discounted securities provisions in Sched 13 to the Finance Act 1996.[2] So far, both the Special Commissioner and the judge have found against the taxpayers. In doing so, they have invoked the so-called Ramsay principle.[3]