BAILII [Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

United Kingdom House of Lords Decisions


You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Furniss (Inspector of Taxes) v Dawson [1983] UKHL 4 (09 February 1983)
URL: http://www.bailii.org/uk/cases/UKHL/1983/4.html
Cite as: [1983] UKHL 4, [1984] 1 All ER 530, [1984] STC 153, [1984] AC 474

[New search] [Buy ICLR report: [1984] AC 474] [Help]


JISCBAILII_CASE_TAX

    Parliamentary Archives,
    HL/PO/JU/18/244

    Furniss (Inspector of Taxes) (Appellant)

    v.
    D.E.R. Dawson (Respondent)

    Furniss (Inspector of Taxes) (Appellant)

    v.

    G.E. Dawson (Respondent) and
    Furniss (Inspector of Taxes (Appellant)

    v.

    E.B. Dawson (by order to carry on dated 13th July 1981)

    (Respondent)

    Murdoch (Inspector of Taxes) (Appellant)

    v.
    R.S. Dawson (Respondent)

    (Consolidated Appeals)

    JUDGMENT

    Die Jovis 9° Februarii 1984

    Upon Report from "the Appellate Committee to whom was
    referred the Cause Furniss against D.E.R. Dawson, Furniss
    against G.E. Dawson and Furniss against E.B. Dawson, Murdoch
    against R.S. Dawson, That the Committee had heard Counsel on
    Wednesday the 14th, Thursday the 15th, Monday the 19th and
    Tuesday the 20th days of December last upon the Petitions and
    Appeals of William Furniss (Her Majesty's Inspector of Taxes)
    of Somerset House, Strand, London WC2R 1LB praying that the
    matter of the Orders set forth in the Schedules thereto,
    namely Orders of Her Majesty's Court of Appeal of the 27th
    day of May 1983 might be reviewed before Her Majesty the
    Queen in Her Court of Parliament and that the said Orders
    might be reversed, varied or altered or that the Petitioner
    might have such other relief in the premises as to Her
    Majesty the Queen in Her Court of Parliament might seem meet;
    as also upon the Cases of Douglas Edward Rexford Dawson and
    Ella Bertha Dawson lodged in answer to the said Appeals; as
    also upon the Petition and Appeal of Ian Stuart Murdoch (Her
    Majesty's Inspector of Taxes) of Somerset House, Strand,
    London WC2R 1LB praying that the matter of the Order set
    forth in the Schedule thereto, namely an Order of Her
    Majesty's Court of Appeal of the 27th day of May 1983 might
    be reviewed before Her Majesty the Queen in Her Court of
    Parliament and that the said Order might be reversed, varied
    or altered or that the Petitioner might have such other
    relief in the premises as to Her Majesty the Queen in Her
    Court of Parliament might seem meet; as also upon the Case
    of Rexford Stuart Dawson lodged in answer to the said Appeal;
    (which said Appeals were by an order of the House of the 6th
    day of July last Ordered to be Consolidated); and due
    consideration had this day of what was offered on either side
    in this Cause:

    HOUSE OF LORDS

    FURNISS (INSPECTOR OF TAXES) (APPELLANT)

    v.

    D.E.R. DAWSON (RESPONDENT)

    FURNISS (INSPECTOR OF TAXES) (APPELLANT)

    v.

    G.E. DAWSON (RESPONDENT)
    AND FURNISS (INSPECTOR OF TAXES) (APPELLANT)

    v.

    E.B. DAWSON (BY ORDER TO CARRY ON DATED 13TH JULY

    1981) (RESPONDENT)

    MURDOCH (INSPECTOR OF TAXES) (APPELLANT)

    v.

    R.S. DAWSON (RESPONDENT)
    (CONSOLIDATED APPEALS)

    Lord Fraser of Tullybelton
    Lord Scarman
    Lord Roskill
    Lord Bridge of Harwich
    Lord Brightman


    LORD FRASER OF TULLYBELTON

    My Lords,

    I have had the advantage of reading in draft the speech
    prepared by my noble and learned friend, Lord Brightman, in these
    consolidated appeals and I entirely agree with his conclusion and
    his reasoning. The facts are fully stated in his speech and I do
    not repeat them. I wish to add only a few comments.

    The importance of this case is, in my opinion, in enabling
    your Lordships' House to explain the effect of the decision in W.T.
    Ramsay
    v. IRC [1982] AC 300 and to dispose of what are, I
    think, the misunderstandings about the scope of that decision which
    have prevailed in the Court of Appeal. In Ramsay the House had
    to consider an elaborate and entirely artificial scheme for avoiding
    liability to tax. Viewed as a whole, it was self-cancelling. In the
    present case the scheme was much simpler, and it was not self-
    cancelling; on the contrary, it had what Vinelott J. described as
    "enduring legal consequences". But while the cases differ in that
    respect, it is not a sufficient ground for distinguishing the present
    case from Ramsay. The true principle of the decision in Ramsay
    was that the fiscal consequences of a preordained series of

    - 1 -


    transactions, intended to operate as such, are generally to be
    ascertained by considering the result of the series as a whole, and
    not by dissecting the scheme and considering each individual
    transaction separately. The principle was stated in the speech of
    Lord Wilberforce in Ramsay at page 324 A-C, especially between
    B & C where his Lordships said this:

    "For the commissioners considering a particular case it is
    "wrong, and an unnecessary self limitation, to regard
    "themselves as precluded by their own finding that
    "documents or transactions are not 'shams', from considering
    "what, as evidenced by the documents themselves or by the
    "manifested intentions of the parties, the relevant
    "transaction
    is. They are not, under the Westminster
    "doctrine or any other authority, bound to consider
    "individually each separate step in a composite transaction
    "intended to be carried through as a whole." (Emphasis
    added).

    It was by applying that principle that Lord Wilberforce in the next
    paragraph of his speech in Ramsay approved of the approach by
    Eveleigh L.J. to the first stage of the transaction in Floor v.
    Davis [1978] 1 Ch. 295. I also attempted to apply the same
    principle when I expressed the opinion (Ramsay at page 339 B - C)
    that "it could, in my opinion, have been the ground of decision in
    "Floor v. Davis ... in accordance with the dissenting opinion of
    "Eveleigh L.J. in the Court of Appeal . . . with which I
    "respectfully agree." Eveleigh LJ. and Lord Wilberforce and I ail
    referred only to the first stage of the transaction in Floor v.
    Davis, and we did not rely to any extent upon the existence of
    the second stage, as the Court of Appeal in the present case
    appear to have thought. The first stage, viewed by itself, was
    clearly more favourable to the argument for the taxpayer than the
    two stages taken together; if the argument for the taxpayer
    failed even at the first stage, that would simply be an additional
    reason for reaching the decision against him. As it happens, the
    whole transaction in the present case is very similar to the first
    stage in Floor v. Davis (the only material difference being that
    Greenjacket has more enduring functions than FMW had).

    The series of two transactions in the present case was
    planned as a single scheme, and I am clearly of opinion that it
    should be viewed as a whole. The relevant transaction, if I may
    borrow the expression used by Lord Wilberforce, consists of the
    two transactions or stages taken together. It was a disposal by
    the respondents of the shares in the operating company for cash to
    Wood Bastow.

    I would allow the appeal.

    LORD SCARMAN

    My Lords,

    I would allow the appeals for the reasons given by my noble
    and learned friend, Lord Brightman. I add a few observations only

    - 2 -


    because I am aware, and the legal profession (and others) must
    understand, that the law in this area is in an early stage of
    development. Speeches in your Lordships' House and judgments in
    the appellate courts of the United Kingdom are concerned more to
    chart a way forward between principles accepted and not to be
    rejected than to attempt anything so ambitious as to determine
    finally the limit beyond which the safe channel of acceptable tax
    avoidance shelves into the dangerous shallows of unacceptable tax
    evasion.

    The law will develop from case to case. Lord Wilberforce
    in Ramsay's case referred to "the emerging principle" of the law.
    What has been established with certainty by the House in Ramsay's
    case is that the determination of what does, and what does not,
    constitute unacceptable tax evasion is a subject suited to
    development by judicial process. The best chart that we have for
    the way forward appears to me, with great respect to all engaged
    on the map-making process, to be the words of my noble and
    learned friend, Lord Diplock, in the Burmah case which my noble
    and learned friend, Lord Brightman, quotes in his speech. These
    words leave space in the law for the principle enunciated by Lord
    Tomlin in the Duke of Westminster's case that every man is
    entitled if he can to order his affairs so as to diminish the burden
    of tax. The limits within which this principle is to operate remain
    to be probed and determined judicially. Difficult though the task
    may be for judges, it is one which is beyond the power of the
    blunt instrument of legislation. Whatever a statute may provide,
    it has to be interpreted and applied by the courts: and ultimately
    it will prove to be in this area of judge-made law that our elusive
    journey's end will be found.

    LORD ROSKILL

    My Lords,

    I have had the opportunity of reading in draft the speeches
    delivered or to be delivered and in common with all your Lordships
    have reached the clear conclusion that these appeals by the
    Revenue must be allowed and that the reasoning in the courts
    below cannot be supported. I respectfully and entirely agree with
    the speeches of my noble and learned friends, Lord Fraser of
    Tullybelton and Lord Brightman. I only add to your Lordships'
    speeches out of respect for all the learned judges from whom the
    House is differing. Repeated perusal of their long and careful
    judgments has left me with the impression, which I am comforted
    to see is shared by my noble and learned friend, Lord Brightman,
    that they were seeking a route by which they might confine the
    decisions in Ramsay and Burmah to cases which were similar on
    their facts, that is to say where the transactions under attack
    were what have been described in argument as "self-cancelling".
    Those cases apart, what the learned judges all regarded as the
    principles long established by the Duke of Westminster's case
    might continue to reign supreme and unchallenged. They sought to
    find support for their conclusions in the majority judgments in the
    Court of Appeal in Floor v. Davis and were not prepared to

    - 3 -

    accept that in Ramsay this House had, at least in principle if not
    explicitly, approved of the much discussed dissenting judgment of
    Eveleigh L.J. in the former case. As my noble and learned friends
    have pointed out, on any view the relevant statements in those
    majority judgments of Sir John Pennycuick and Buckley L.J. were
    obiter since this House subsequently decided in favour of the
    Revenue on another point and therefore had no cause to pronounce
    upon the rival merits of the views expressed upon what became
    known as "the "first issue".

    The error, if I may venture to use that word, into which
    the courts below have fallen is that they have looked back to 1936
    and not forward from 1982. They do not appear to have
    appreciated the true significance of the passages in the speeches
    in Ramsay of my noble and learned friends, Lord Wilberforce at
    pages 325/6 and Lord Fraser of Tullybelton at page 337, and, even
    more important, of the warnings in Burmah given by my noble and
    learned friends, Lord Diplock and Lord Scarman in the passages to
    which Lord Brightman refers and which I will not repeat. It is
    perhaps worth recalling the warning given albeit in another context
    by Lord Atkin, who himself dissented in the Duke of Westminster's
    case, in United Australia Ltd, v. Barclays Bank Ltd. [1941] A.C. 1
    at page 29, "when these ghosts of the past stand in the path of
    "justice clanking their mediaeval chains, the proper course for the
    "judge is to pass through them undeterred." 1936, a bare half
    century ago, cannot be described as part of the middle ages but
    the ghost of the Duke of Westminster and of his transaction, be it
    noted a single and not a composite transaction, with his gardener
    and with other members of his staff, has haunted the
    administration of this branch of the law for too long. I confess
    that I had hoped that that ghost might have found quietude with
    the decisions in Ramsay and in Burmah. Unhappily it has not.
    Perhaps the decision of this House in these appeals will now
    suffice as exorcism.

    I would only add, ignoring for the moment that the effect
    of the Duke of Westminster's case was subsequently nullified by
    statute, that I express no view whether were that case to arise
    for decision since 1982, the Duke or the Revenue would emerge as
    the ultimate victor.

    My Lords, learned counsel for the taxpayers ultimately found
    himself constrained to admit that the majority judgments in Floor
    v. Davis could not stand alongside the decisions in Ramsay and
    Burmah.
    I think he was entirely right to make this concession.
    But he sought to distinguish the present cases from Floor v. Davis
    on their facts contending that in these cases Green jacket's
    existence had enduring consequences whereas in Floor v. Davis
    Donmarco, the recipient of the ultimate proceeds of sale, did not.
    He also submitted that the dissenting judgment of Eveleigh L.J.
    was founded upon consideration of stage 2 of the transactions
    there in question and not only upon stage 1. My Lords, with
    respect, I regard both submissions as untenable. The learned Lord
    Justice was quite clearly treating the stage 1 transaction as
    involving a disposal to the ultimate purchaser which itself
    attracted capital gains tax. There is no relevant reference to
    stage 2 from beginning to end of his judgment. It was his view
    which found support in Ramsay and rejection of it at the present
    time would involve rehabilitation of the majority judgments in

    - 4 -

    Floor v. Davis, which as already pointed out were not and indeed
    are not now capable of being supported.

    My Lords, I think Oliver L.J. was also influenced by fears
    of double taxation were the Revenue's submissions to be accepted.
    In my view the answer to the learned Lord Justice's fears is
    provided by my noble and learned friend, Lord Brightman, in his
    speech in accordance with the submissions of Mr. Millet Q.C. for
    the Revenue and I have nothing further to add on this part of the
    case.

    In conclusion, therefore, I am convinced that there was a
    disposal by the Dawsons to Wood Bastow in consideration of the
    payment to be made by Wood Bastow to Greenjacket at the behest
    of the Dawsons. This disposal is not exempt. Capital gains tax is
    payable. It is for these reasons as well as for those expressed by
    my noble and learned friends to whose speeches I have already
    referred I would allow these appeals. I would however make no
    order as to costs either in this House or in the courts below.

    LORD BRIDGE OF HARWICH

    My Lords,

    I have had the advantage of reading in draft the speech of
    my noble and learned friend, Lord Brightman, and I agree with it.

    In one sense these appeals can be disposed of on a very
    short and simple ground. The facts of the present case are, for
    relevant purposes, indistinguishable from the facts of Floor v.
    Davis [1978] 1 Ch. 295 (CA), [1980] AC 695 (HL) limited to the
    transactions which in that case were referred to throughout as
    constituting stage 1. Floor v. Davis was in fact decided in favour
    of the Crown both in the Court of Appeal and the House of Lords
    on a ground wholly irrelevant to the present appeal arising from
    the transactions involved in stage 2, and the stage 1 point was
    never considered when the case came before this House. Hence
    the conflicting opinions expressed in the Court of Appeal as to the
    legal effect of the stage 1 transactions were entirely obiter. The
    judgment of Eveleigh L.J. relating to stage 1 contains no word of
    reference to stage 2 and the theory that he was influenced in his
    conclusion as to stage 1 by any of the factors arising at stage 2
    is quite untenable. Eveleigh L.J. concluded that the transactions
    involved in stage 1, by themselves, effected a disposal by the
    taxpayers of their shares to the ultimate purchasers which
    attracted capital gains tax. That conclusion was unanimously
    approved, albeit again obiter, by your Lordships' House in W.T.
    Ramsay Ltd,
    v. I.R.C. [1982] AC 300. It inevitably follows that,
    unless your Lordships are willing to reject that unanimous opinion
    of the House and reinstate the views on this point of the majority
    of the Court of Appeal in Floor v. Davis (Buckley L.J. and Sir
    John Pennycuick) whose reasoning counsel for the taxpayers in the
    instant case did not feel able to support, the appeal must succeed.

    - 5 -

    But in another sense the present appeal marks a further
    important step, as a matter of decision rather than mere dictum,
    in the development of the courts' increasingly critical approach to
    the manipulation of financial transactions to the advantage of the
    taxpayer. Of course, the judiciary must never lose sight of the
    basic premise expressed in the celebrated dictum of Lord Tomlin
    in I.R.C. v. Duke of Westminster [1936] AC 1, at p. 19, that:
    "Every man is entitled if he can to order his affairs so that the
    "tax attaching under the appropriate Acts is less than it otherwise
    "would be." Just a year earlier Judge Learned Hand, giving the
    judgment of the United States 2nd Circuit Court of Appeals in
    Helvering v. Gregory 69 Fed. Rep., 2nd Series, 809, had said the
    same thing in different words: "Anyone may so arrange his affairs
    "that his taxes shall be as low as possible; he is not bound to
    "choose that pattern which will best pay the Treasury." Yet,
    while starting from this common principle, the Federal Courts of
    the United States and the English courts have developed, quite
    independently of any statutory differences, very different
    techniques for the scrutiny of tax avoidance schemes to test their
    validity.

    The extent to which the speeches of the majority in the
    Westminster case still tend to dominate the thinking in this field
    of the English judiciary is well shown by the judgments in the
    courts below in the instant case. In particular, the Westminster
    case seems still to be accepted as establishing that the only
    ground on which it can be legitimate to draw a distinction
    between the substance and the form of transactions in considering
    their tax consequences is that the transactions are shams, in the
    sense that they are not what, on their face, they purport to be.
    The strong dislike expressed by the majority in the Westminster
    case for what Lord Tomlin described as "the doctrine that the
    "court may ignore the legal position and regard what is called 'the
    "'substance of the matter'" is not in the least surprising when one
    remembers that the only transaction in question was the Duke's
    covenant in favour of his gardener and the bona fides of that
    transaction was never for a moment impugned.

    When one moves, however, from a single transaction to a
    series of inter-dependent transactions designed to produce a given
    result, it is, in my opinion, perfectly legitimate to draw a
    distinction between the substance and the form of the composite
    transaction without in any way suggesting that any of the single
    transactions which make up the whole are other than genuine.
    This has been the approach of the United States Federal Courts
    enabling them to develop a doctrine whereby the tax consequences
    of the composite transaction are dependent on its substance not its
    form. I shall not attempt to review the American authorities, nor
    do I propose a wholesale importation of the American doctrine in
    all its ramifications into English law. But I do suggest that the
    distinction between form and substance is one which can usefully
    be drawn in determining the tax consequences of composite
    transactions and one which will help to free the courts from the
    shackles which have for so long been thought to be imposed upon
    them by the Westminster case.

    I shall attempt no exhaustive exposition of all the criteria
    by which, for the purpose I suggest, form and substance are to be
    distinguished. Once a basic doctrine of form and substance is

    - 6 -

    accepted, the drawing of precise boundaries will need to be worked
    out on a case by case basis. But I venture to point out what a
    simple and readily applicable test a distinction between form and
    substance would have provided to arrive at the conclusions already
    reached in some of the cases of composite transactions decided by
    your Lordships' House. It would need no more than a cursory
    exposition of the avoidance schemes in Ramsay and Rawling to
    lead any intelligent layman to the conclusion that neither scheme
    was designed to achieve any substantial effect in the real world
    and that the elaborate steps designed to manufacture a tax
    deductible loss in each case were purely formal in character. If
    Special or General Commissioners had been directed to approach
    either case on the basis that the tax consequences of the
    interlocking, inter-dependent and predetermined transactions were
    to be judged by reference to the substance not the form of the
    composite transaction, I cannot think they would have had any
    difficulty in arriving at the right answer.

    The facts in C.I.R. v. Burmah Oil Co. Ltd. 54 TC 200 were
    more complicated but the effect of the decision of this House
    could fairly be summarised by saying that the scheme adopted by
    Burmah to convert a bad debt owing to it by a subsidiary company
    (a non-deductible loss) into a loss realised on the liquidation of
    that subsidiary which would be tax deductible was formal rather
    than substantial. In the words of Lord Fraser of Tullybelton:

    "The question in this part of the appeal is whether the
    "present scheme, when completely carried out, did or did
    "not result in a loss such as the legislation is dealing with,
    "which I may call for short, a real loss. In my opinion it
    "did not."

    Lord Diplock referred to:

    "a pre-ordained series of transactions (whether or not they
    "include the achievement of a legitimate commercial end)
    "into which there are inserted steps that have no
    "commercial purpose apart from the avoidance of a liability
    "to tax which in the absence of those particular steps would
    "have been payable."

    This seems to me to be language expressing with perfect precision
    the concept of steps which are formal rather than substantial.

    The distinction between form and substance in the instant
    case is still easier to draw. As my noble and learned friend, Lord
    Brightman, has pointed out, if there had been here at the outset a
    tripartite contract between the taxpayers, Greenjacket and Wood
    Bastow, the beneficial interest in the taxpayers' shares would have
    passed directly to Wood Bastow. The twin purpose of achieving
    the identical result by the elaborate and carefully timed scheme
    fully described in the speech of my noble and learned friend, Lord
    Brightman, was (i) to avoid a direct disposal of the shares to Wood
    Bastow and (ii) to ensure that for a scintilla temporis the
    beneficial interest in the shares was held by Greenjacket in order
    to found Green jacket's claim to have been in control of the
    operating companies for the purposes of paragraph 6(2) of Schedule
    7 to the Finance Act 1965. Nothing could be clearer than that

    - 7 -

    these two features of the pre-ordained scheme were purely formal
    and had no effect on the substance of the composite transaction.

    I would allow the appeals.

    LORD BRIGHTMAN

    My Lords,

    The transaction which we are called upon to consider is not
    a tax avoidance scheme, but a tax deferment scheme. The
    scheme has none of the extravagances of certain tax avoidance
    schemes which have recently engaged the attention of the courts,
    where the taxpayer who has been fortunate enough to realise a
    capital profit has gone out into the street and, with the aid of
    astute advisers, manufactured out of a string of artificial
    transactions a supposed loss in order to counteract the profit
    which he has already made. The scheme before your Lordships is
    a simple and honest scheme which merely seeks to defer payment
    of tax until the taxpayer has received into his hands the gain
    which he has made.

    There are three consolidated appeals. The taxpayers are
    Mr. George Dawson, who has died since the start of the
    proceedings and whose estate is represented by his widow; and his
    sons Mr. Douglas Dawson and Mr. Rexford Dawson.

    The facts are simple, and were admirably found by the
    Special Commissioners for the purpose of dealing with the only
    point which was then in issue. They are as follows:-

    1. Mr. George Dawson, together with his wife and two sons, held
    shares in two companies (the Operating Companies) which
    manufactured clothing. They held all the shares in one company
    and most of the shares in the other company. I propose to ignore
    this small outside shareholding. Mr. Wood was the Chairman and
    Managing Director of Wood Bastow Holdings Ltd (Wood Bastow).
    In September 1971 Mr. Dawson and Mr. Wood agreed in principle
    that Wood Bastow should buy the entire shareholding in the
    Operating Companies.

    1. Solicitors were instructed on each side. Further negotiations
      took place. In particular, the solicitors acting for Wood Bastow
      asked for the capital of the Operating Companies to be
      reorganised so as to include the issue of renounceable letters of
      allotment, in order to minimise the stamp duty payable by them
      on the purchase.

    2. Acting on advice, the Dawsons decided not to sell directly to
      Wood Bastow. They "arranged first to exchange their shares for
      "shares in an investment company to be incorporated in the Isle of
      "Man. Any sale to the ultimate purchaser would, it was
      "contemplated, be a sale by the Isle of Man company."

    4. On 15 November 1971 a meeting took place between the
    solicitors. At this meeting the solicitors for Wood Bastow first

    - 8 -

    became aware of the proposal to introduce an Isle of Man
    company. They accepted the proposal, subject to certain
    amendments being made to the draft documents then in course of
    preparation. 2O December was fixed as the date for completion.

    5. On 16 December the following events occurred:-

    (a) A company called Greenjacket Investments Ltd.
    (Greenjacket) was incorporated in the Isle of Man by Manx
    solicitors acting upon the instructions of the Dawson
    solicitors. The subscribers to the memorandum of
    association were Mr. J. E. Crellin, a member of the Manx
    firm of solicitors, and Mr. Moroney, who was articled to
    them.

    (b) A meeting of the subscribers took place at which they
    and Mr. P. G. Crellin were nominated as the first directors.

    (c) A first meeting of the Board took place at which
    there were produced to the meeting (i) the agreement,
    which was then presumably in the form of an unexecuted
    engrossment or a draft, whereby Greenjacket would purchase
    the shares in the Operating Companies for the sum of
    £152,000 which was to be satisfied by the issue of shares
    in Greenjacket; I will call this "the First Sale Agreement";
    and (ii) a draft agreement for Greenjacket to sell the shares
    in the Operating Companies to Wood Bastow for £152,000;
    I will call this "the Second Sale Agreement".

    (d) At the same Board meeting it was resolved (i) that
    the two Sale Agreements be proceeded with; (ii) that the
    First Sale Agreement be executed; it was ultimately dated
    2O December and exchanged on that date; (iii) that the
    shares in the Operating Companies (with an immaterial
    exception)be taken in the name of Greenjacket; (iv) that Mr.
    Moroney be authorised to execute the Second Sale
    Agreement on behalf of Greenjacket; and (v) that in
    anticipation thereof the transfers of the shares in the
    Operating Companies to Wood Bastow (as they would exist
    after later reorganisation) be executed and held in escrow,
    which was then done.

    6. On 2O December a meeting for the completion of the sale to
    Wood Bastow took place as planned. It was held at the offices of
    Messrs. Browne, Jacobson and Roose, the Dawson solicitors. The
    following activities took place:-

    1. Meetings of the Boards of the Operating Companies
      and extraordinary general meetings of such companies were
      held at which resolutions were passed to reorganise the
      share capitals of the Operating Companies in the manner
      desired by Wood Bastow.

    2. Mr. Moroney, who attended completion, produced the
      First Sale Agreement and telephoned the Isle of Man in
      order to ascertain that the Board of Greenjacket were
      allotting the consideration shares in that company to the
      Dawsons.

    - 9 -

    (c) The Boards of the Operating Companies approved
    transfers of the shares therein to Greenjacket.

    (d) The Second Sale Agreement was exchanged and the
    sale completed in consideration of the payment of the
    purchase money by Wood Bastow to Greenjacket.

    (e) The Boards of the Operating Companies approved the
    transfers of the shares therein to Wood Bastow.

    The Board meetings of the Operating Companies were
    interrupted on three occasions; first, to enable extraordinary
    general meetings to be held to reorganise the share capitals;
    secondly, to enable the First Sale Agreement to be exchanged
    between the Dawsons and Greenjacket; and thirdly, to enable the
    Second Sale Agreement to be exchanged. There are very full
    minutes of the Board meeting of one of the Operating Companies
    and similar minutes exist in the case of the other company.
    These show that the whole process was planned and executed with
    faultless precision. The meetings began at 12.45 p.m. on 20
    December, at which time the shareholdings of the Operating
    Companies were still owned by the Dawsons unaffected by any
    contract for sale. They ended with the shareholdings in the
    ownership of Wood Bastow. The minutes do not disclose when the
    meeting ended, but perhaps it was all over in time for lunch.

    Section 19 of the Finance Act 1965 charges tax in respect of
    capital gains accruing to a person on the disposal of assets. There
    is no definition of disposal and it scarcely needs definition.
    Paragraph 6 of Schedule 7 provides certain exceptions in the case
    of company amalgamations. One exception applies to shares in a
    company transferred to another company which thereby acquires
    control, in exchange for shares in the transferee company. In such
    a case there is deemed to be no disposal of the former
    shareholding. The new shareholding and the old shareholding are
    to be treated as the same asset.

    In the instant case Mr. George Dawson and his sons were
    assessed to capital gains tax in respect of the year 1970/72 in the
    sums of £57,000, £28,000 and £28,000 The then argument on
    the part of the Revenue was that Greenjacket did not acquire
    control of the Operating Companies within the meaning of
    paragraph 6 of Schedule 7, because Greenjacket was a nominee or
    bare trustee for the Dawsons. If on the other hand, as the
    taxpayers contended, Greenjacket did acquire control of the
    Operating Companies, any charge to capital gains tax would, it
    was contended, be deferred until such time as the taxpayers
    disposed of their shareholdings in Greenjacket and thereby realised
    a chargeable gain. At this point the one and only question at
    issue was whether Greenjacket acquired control of the Operating
    Companies within the meaning of the Act. Indeed, that is in a
    sense the only question at issue now, but it falls to be answered
    in a very different legal context from that in which it originally
    fell to be considered.

    After a two-day hearing, including the oral evidence of four
    witnesses, the Special Commissioners held that Greenjacket had
    acquired control of the Operating Companies within the meaning of
    the Act. They therefore held that the First Sale Agreement was

    - 10 -

    not a disposal by the Dawsons to Green jacket for the purposes of
    capital gains tax, and the assessments were discharged. The
    decision was given on 21 January 1976. The stated case was signed
    a year later, but for some reason it was over two years before it
    reached the High Court. During this long wait there occurred
    what has been described as "a significant change in the approach
    "adopted by this House" towards artificial tax saving schemes.
    The story of this change begins with the case of Floor v. Davis
    [1978] 1 Ch. 295, [1980] A.C. 695. In that case the taxpayer and
    others were shareholders in a company which I shall call I.D.M.
    They agreed in principle to sell their shares to another company
    which I shall call K.D.I. The vendors then decided to put into
    effect the following scheme. On 24 February 1974 they caused to
    be incorporated a company which I shall call F.N.W. On 27
    February the vendors agreed to sell their I.D.M. shares to F.N.W.
    in consideration of an allotment of shares in F.N.W. On 28
    February F.N.W. agreed to sell the I.D.M. shares to K.D.I, for a
    cash consideration. This can conveniently be called stage 1. On 5
    April a special resolution was passed to wind up F.N.W.
    voluntarily. As a result of a complicated reorganisation of the
    capital of F.N.W. the liquidation of F.N.W. had the effect of
    passing most of its assets, which included the cash received from
    K.D.I., to Donmarco Ltd., a company registered in the Cayman
    Islands. This can conveniently be called stage 2. I will first
    summarise the decision in that case, before turning an more detail
    to the judgments. The Court of Appeal held (1) that the taxpayer
    could not be regarded as having disposed of his shareholding in
    I.D.M. to K.D.I., Eveleigh L.J. dissenting; (2) that F.N.W. acquired
    control of I.D.M., so that there was no disposal for capital gains
    tax purposes on the sale of the shares by the taxpayer to F.N.W.;
    but (3) that the taxpayer had exercised control over the shares in
    F.N.W. by reason whereof value had passed out of those shares
    into the shares in Donmarco, and in consequence the taxpayer was
    deemed by virtue of paragraph 15(2) of Schedule 7 to have .disposed
    of his shares in F.N.W. and was taxable accordingly; this
    paragraph taxes transactions which involve gratuitous transfers of
    value derived from assets and is not in point in the instant case.

    The leading judgment was delivered by Sir John Pennycuick .
    The first issue was whether the taxpayer made a disposal of his
    I.D.M. shares to K.D.I. Before answering this question he
    identified the critical transactions as the agreement of the 27
    February 1969 to sell the I.D.M. shares to F.N.W. in consideration
    of the issue of F.N.W. shares, and the sale of the I.D.M. shares a
    day later by F.N.W. to K.D.I. It was, he said, impossible upon the
    plain effect of the two sale agreements to maintain that the
    taxpayer had sold his shares to anyone other than F.N.W., or that
    K.D.I, had purchased the shares from anyone other than F.N.W.
    Lord Justice Buckley similarly held that "the transactions which
    "together make up stage 1 of the series cannot for the present
    "purpose properly be regarded as a disposal by the taxpayer and
    "his sons-in-law of their shares in I.D.M. to K.D.I." It will be
    seen from the full report of the judgments that this conclusion
    was reached by both Lords Justices without any reference
    whatever to the existence of stage 2.

    In his dissenting judgment Lord Justice Eveleigh took the
    view that the I.D.M. shares were disposed of by the taxpayer to
    K.D.I. The ratio of his decision was as follows:-

    - 11 -

    "It is dear that right from the beginning K.D.I, indicated
    "that it would purchase the shares. The only reason for
    "avoiding a direct sale to them was the prospect of capital
    "gains tax. In an attempt to avoid paying this, as is frankly
    "accepted, the initial tranfer to F.N.W. took place. There
    "was however no real possibility at any time that the
    "shares would not reach K.D.I. By virtue of their control of
    "F.N.W. the shareholders guaranteed from the moment they
    "parted with the legal ownership that the shares would
    "become the property of K.D.I. No one could prevent this
    "against their wishes. By virtue of the arrangement initially
    "made between them each was under an obligation to the
    "other to do nothing to stop the shares arriving in the hands
    "of K.D.I. They controlled the destiny of the shares from
    "beginning to end in pursuance of a continuing intention on
    "their part that the shares should be transferred to K.D.I."

    In reaching this conclusion, it will be observed that he also
    did not refer to or place any reliance whatever upon the existence
    of stage 2.

    The taxpayer appealed to this House, and naturally opened
    the appeal by arguing the only point upon which he had failed in
    the Court of Appeal, namely, the applicability of paragraph 15 of
    Schedule 7. This House decided that point against him, which was
    sufficient to determine the appeal. Counsel for the Revenue was
    not therefore required to address this House on the issue whether
    there was a disposal by the taxpayer of the I.D.M. shares to
    K.D.I., and this House had no occasion to express a view.

    The decision of this House in Floor was followed two years
    later by the decision in W. T. Ramsay Ltd, v. I.R.C. [1982] A.C.
    300. In that case a farming company had realised a chargeable
    gain of some £188,000 on the sale of farm land in Lincolnshire
    upon which capital gains tax was assessed. In order to mitigate,
    as it was hoped, the tax that would otherwise be payable, the
    taxpayer embarked upon a scheme which was designed to
    manufacture a paper loss of £173,647 by means of a series of loan
    and share transactions. Features of the scheme were as follows:-

    1. There was no commercial justification for the scheme. There
    was no prospect of a profit. In fact there was bound to be a
    small loss in the form of the fees and similar expenses which
    would be payable.

    2. No step in the scheme was a sham. Every step was
    genuinely carried through, and was exactly what it purported to
    be.

    3. There was no binding arrangement that each planned step
    would be followed by the next planned step, but it was reasonable
    to assume that all the steps would in practice be carried out.

    4. The scheme was designed to, and did, return the taxpayer to
    the position which he occupied before it began, except for the
    payment of the expenses of the scheme.

    - 12 -

    5. The money needed for the various steps was lent by a finance
    house on terms which ensured that the loan came back to the
    finance house on completion; the taxpayer's personal outlay was
    confined to his expenses of the scheme.

    The leading speech was that of Lord Wilberforce. He
    reviewed recent cases, starting with Floor. His comment was as
    follows:-

    "The key transaction in this scheme was a sale of shares
    "in a company called I.D.M. to one company (F.N.W.) and a
    "resale by that company to a further company (K.D.I.). The
    "majority of the Court of Appeal thought it right to look at
    "each of the sales separately and rejected an argument by
    "the Crown that they could be considered as an integrated
    "transaction. But Eveleigh L.J. upheld that argument. He
    "held that the fact that each sale was genuine did not
    "prevent him from regarding each as part of a whole, or
    "oblige him to consider each step in isolation. Nor was he
    "so prevented by I.R.C. The Duke of Westminster [1936] A.C.
    "1. Looking at the scheme as a whole, and finding that the
    "taxpayer and his sons-in-law had complete control of the
    "I.D.M. shares until they reached K.D.I., he was entitled to
    "find that there was a disposal to K.D.I. When the case
    "reached this House it was decided on a limited argument,
    "and the wider point was not considered. This same
    "approach has commended itself to Templeman L.J. and has
    "been expressed by him in impressive reasoning in the Court
    "of Appeal's judgment in Eilbeck v. Rawling. It will be
    "seen from what follows that these judgments, and their
    "emerging principle, commend themselves to me."

    The fact that the court accepted that each step in a
    transaction was a genuine step producing its intended legal result,
    did not confine the court to considering each step in isolation for
    the purpose of assessing the fiscal results. "Viewed as a whole, a
    "composite transaction may produce an effect which brings it
    "within a fiscal provision." Lord Wilberforce added later, "To
    "force the courts to adopt, in relation to closely integrated
    "situations, a step by step, dissecting, approach which the parties
    "themselves may have negated, would be a denial rather than an
    "affirmation of the true judicial process. In each case the facts
    "must be established, and a legal analysis made: legislation cannot
    "be required or even be desirable to enable the courts to arrive at
    "a conclusion which corresponds with the parties' own intentions."
    Lord Fraser of Tullybelton delivered a concurring speech, in which
    he expressed his agreement with the dissenting opinion of Lord
    Justice Eveleigh in Floor and with the reasoning that led to it.
    Lord Russell of Killowen expressed his full agreement with the
    speeches of Lord Wilberforce and Lord Fraser of Tullybelton as did
    Lord Roskill and Lord Bridge of Harwich.

    Counsel for the respondents in this appeal laid emphasis on
    the fact, which is correct, that in Ramsay the transactions under
    attack were, as it was called, "self-cancelling", which were
    designed to return and did return the taxpayer to the starting
    position except for the payment of expenses. Both Lord
    Wilberforce and Lord Fraser of Tullybelton referred expressly to

    - 13 -

    this characteristic. The transactions in the present appeal were
    not self-cancelling, because Greenjacket was brought into being for
    an indefinite period, and the consideration money paid by Wood
    Bastow, which was the foundation of the capital gain, would never
    reach the hands of the Dawsons, save by way of loan, unless and
    until Greenjacket was wound up or its capital was reduced.

    Following the decision of this House in Ramsay, the
    Revenue early in July 1981 gave notice to the respondents under
    R.S.C. Order 91 rule 4 that it would if necessary contend that the
    Dawsons had disposed of their shares in the Operating Companies
    to Wood Bastow and were liable to capital gains tax accordingly.
    The appeal came before Vinelott J. in mid-July and judgment was
    reserved. However, before judgment was delivered the case of
    I.R.C. v. Burmah Oil Co.Ltd. was argued and decided in this
    House. Vinelott J. therefore deferred giving judgment until the
    parties had had an opportunity to consider that case.

    Burmah involved another artificial tax avoidance scheme, the
    details of which are irrelevant for present purposes. The
    importance of the case lies in its reaffirmation of the Ramsay
    principle. I read this passage from the speech of Lord Diplock:-

    "It would be disingenuous to suggest, and dangerous on
    "the part of those who advise on elaborate tax avoidance
    "schemes to assume, that Ramsay's case did not mark a
    "significant change in the approach adopted by this House in
    "its judicial role to a pre-ordained series of transactions
    "(whether or not they include the achievement of a
    "legitimate commercial end) into which there are inserted
    "steps that have no commercial purpose apart from the
    "avoidance of a liability to tax which in the absence of
    "those particular steps would have been payable. The
    "difference is in approach. It does not necessitate the
    "overruling of any earlier decisions of this House; but it
    "does involve recognising that Lord Tomlin's oft quoted
    "dictum in I.R.C. v. Duke of Westminster 'Every man is
    "'entitled if he can to order his affairs so that the tax
    "'attaching under the appropriate Acts is less than it
    "'otherwise would be', tells us little or nothing as to what
    "methods of ordering one's affairs will be recognised by the
    "courts as effective to lessen the tax that would attach to
    "them if business transactions were conducted in a
    "straightforward way."

    The warning was repeated in the speech of Lord Scarman;
    "First, it is of the utmost importance that the business community
    "(and others, including their advisers) should appreciate, as my
    "noble and learned friend Lord Diplock has emphasised, that
    "Ramsay's case marks 'a significant change in the approach
    "'adopted by this House in its judicial role' towards tax avoidance
    "schemes. Secondly, it is now crucial when considering any such
    "scheme to take the analysis far enough to determine where the
    "profit, gain or loss is really to be found."

    That then was the state of judicial precedent when Vinelott
    J. came to give judgment in the instant case. He said that the
    question which he had to decide was how far the new approach
    justified or required the proposition for which the Crown

    - 14 -

    contended, that is to say, the proposition set out in the Order 91
    notice. The gist of his long and careful judgment is that the
    principle does not apply, and a transaction cannot be disregarded
    and treated as fiscally a nullity, if it has "enduring legal
    "consequences", a phrase which he repeated several times in his
    judgment. He identified "the enduring legal consequences" in the
    instant case as (i) the fact that Green jacket owned beneficially the
    proceeds of sale of the shares in the Operating Companies, which
    were brought into Greenjacket's accounts and upon the income of
    which Greenjacket was liable to tax, and (ii) the fact that Wood
    Bastow's rights under the Second Sale Agreement were rights
    against Greenjacket, whereas it would have had no such rights if
    the sale had been by the Dawsons to Wood Bastow. The effect of
    his judgment was to change Lord Diplock's formulation from "a
    "pre-ordained series of transactions . . . into which there are
    "inserted steps that have no commercial purpose apart from the
    "avoidance of a liability to tax" to "a pre-ordained series of
    "transactions . . . into which there are inserted steps that have
    "no enduring legal consequences." That would confine the Ramsay
    principle to so-called self-cancelling transactions.

    The learned judge's re-statement of Lord Diplock's
    formulation enabled him, as he thought, to escape from the
    difficulty imposed by this House's approval of the dissenting
    judgment in Floor. F.N.W. was placed in liquidation and its assets
    distributed; consequently its existence had no enduring effect on
    the rights and obligations of the parties after the completion of
    the scheme.

    On appeal the leading judgment was delivered by Lord
    Justice Oliver. He was, I think, greatly influenced by what he
    conceived to be oppressive double taxation which would follow if
    the Crown were right in its submission. His fears were in my
    view misconceived. If the Crown's case were correct, there would
    be a disposal by the Dawsons to Wood Bastow on which capital
    gains tax would be payable. There could be no additional capital
    gains tax on the steps by which that disposal was achieved, namely
    the sale first to Greenjacket and then by Greenjacket to Wood
    Bastow, because it is the Crown's case that the fiscal
    consequences of the introduction of Greenjacket are to be
    disregarded. The Revenue cannot, and does not claim to, have it
    both ways. There would of course be a charge to capital gains
    tax when the Dawsons realised their shares in Greenjacket, if a
    chargeable gain then arose. For that purpose the base cost of the
    Greenjacket shares allotted to the Dawsons would be the price
    which they paid for them, namely the value of the shares in the
    Operating Companies at the date of the transactions. That
    element of double taxation exists whenever a shareholder sells at a
    profit his shares in a company which has itself realised a capital
    asset at a profit. So I do not see any undesirable element of
    double taxation involved in the Revenue's submission.

    Lord Justice Oliver was satisfied that, applying the Ramsay
    principle, he was entitled to reject the Revenue's contention
    provided that the matter was not concluded by this House's
    approval of the judgment of Lord Justice Eveleigh in the Floor
    case. The question on the appeal, he said, was whether Vinelott
    J. was right to distinguish the Floor case. His conclusion was that

    - 15 -

    the judgment of Lord Justice Eveleigh, and therefore this House's
    endorsement of it, could not properly be read divorced from the
    background that stage 1 was, and was all along intended to be,
    followed by stage 2, as a result of which the proceeds of sale
    became the absolute property of the taxpayers. (I observe in
    parenthesis that there seems to be no finding in the Floor case
    that the assets of F.N.W. on its liquidation became the absolute
    property of the taxpayers). The learned Lord Justice's approach
    to the judgment of Lord Justice Eveleigh and to this House's
    endorsement of it is in my opinion totally untenable. There is no
    indication whatever that Lord Justice Eveleigh paid the remotest
    attention to stage 2 at that stage of his judgment, or that the
    approval of this House proceeded upon the basis that the existence
    of stage 2 was significant or decisive.

    Lord Justice Kerr adopted the reasoning and thus the errors
    of Lord Justice Oliver.

    Lord Justice Slade accepted that there was no relevant
    distinction between the instant case and Floor, but nevertheless
    concluded that this House's approval of the dissent of Lord Justice
    Eveleigh was not intended to bind the court in future cases to the
    conclusion that, on facts such as were found in stage 1, there had
    been a disposal by the original vendor to the ultimate purchaser.
    The references to Floor, he said, were "clearly a convenient mode
    "of illustrating the broader approach to tax avoidance schemes
    "which [their Lordships] were concerned to establish." Having
    freed himself from the uncomfortable shackles of judicial
    precedent, he said that, on the facts, he could not see how there
    could have failed to be a disposal by the Dawsons to Greenjacket
    and by Greenjacket to Wood Bastow. He relied particularly on the
    undisputed fact that the First Sale Agreement passed the full legal
    and beneficial title to Greenjacket, and that the Second Sale
    Agreement passed the full legal and beneficial title to Wood
    Bastow.

    It is difficult to escape the impression that the High Court
    and the Court of Appeal were determined at all costs to confine
    the Ramsay principle to the sort of self-cancelling arrangement
    which existed in that case, and to resist what they conceived to
    be a deplorable inroad into the sacred principles of the
    Westminster case.

    My Lords, in my opinion the rationale of the new approach
    is this. In a pre-planned tax saving scheme, no distinction is to
    be drawn for fiscal purposes, because none exists in reality,
    between (i) a series of steps which are followed through by virtue
    of an arrangement which falls short of a binding contract, and (ii)
    a like series of steps which are followed through because the
    participants are contractually bound to take each step seriatim. In
    a contractual case the fiscal consequences will naturally fall to be
    assessed in the light of the contractually agreed results. For
    example, equitable interests may pass when the contract for sale
    is signed. In many cases equity will regard that as done which is
    contracted to be done. Ramsay says that the fiscal result is to
    be no different if the several steps are pre-ordained rather than
    pre-contracted. For example, in the instant case tax will, on the
    Ramsay principle, fall to be assessed on the basis that there was a
    tripartite contract between the Dawsons, Greenjacket and Wood

    - 16 -

    Bastow under which the Dawsons contracted to transfer their
    shares in the Operating Companies to Green jacket in return for an
    allotment of shares in Greenjacket, and under which Greenjacket
    simultaneously contracted to transfer the same shares to Wood
    Bastow for a sum in cash. Under such a tripartite contract the
    Dawsons would clearly have disposed of the shares in the
    Operating Companies in favour of Wood Bastow in consideration of
    a sum of money paid by Wood Bastow with the concurrence of the
    Dawsons to Greenjacket. Tax would be assessed, and the base
    value of the Greenjacket shares calculated, accordingly. Ramsay
    says that this fiscal result cannot be avoided because the pre-
    ordained series of steps are to be found in an informal
    arrangement instead of in a binding contract. The day is not
    saved for the taxpayer because the arrangement is unsigned or
    contains the magic words "this is not a binding contract".

    The formulation by Lord Diplock in Burmah expresses the
    limitations of the Ramsay principle. First, there must be a pre-
    ordained series of transactions; or, if one likes, one single
    composite transaction. This composite transaction may or may not
    include the achievement of a legitimate commercial (i.e. business)
    end. The composite transaction does, in the instant case; it
    achieved a sale of the shares in the Operating Companies by the
    Dawsons to Wood Bastow. It did not in Ramsay. Secondly, there
    must be steps inserted which have no commercial (business)
    purpose apart from the avoidance of a liability to tax - not "no
    "business effect". If those two ingredients exist, the inserted steps
    are to be disregarded for fiscal purposes. The court must then
    look at the end result. Precisely how the end result will be taxed
    will depend on the terms of the taxing statute sought to be
    applied.

    In the instant case the inserted step was the introduction of
    Greenjacket as a buyer from the Dawsons and as a seller to Wood
    Bastow. That inserted step had no business purpose apart from
    the deferment of tax, although it had a business effect. If the
    sale had taken place in 1964 before capital gains tax was
    introduced, there would have been no Greenjacket.

    The formulation, therefore, involves two findings of fact,
    first whether there was a pre-ordained series of transactions, i.e. a
    single composite transaction. Secondly, whether that transaction
    contained steps which were inserted without any commercial or
    business purpose apart from a tax advantage. Those are facts to
    be found by the Commissioners. They may be primary facts or,
    more probably, inferences to be drawn from the primary facts. If
    they are inferences, they are nevertheless facts to be found by the
    Commissioners. Such inferences of fact cannot be disturbed by
    the court save on Edwards v. Bairstow principles.

    In Marriott v. Oxford and District Co-operative Society Ltd.
    (No. 2)
    [1970] 1 Q.B. 186, Lord Denning M.R., at page 192, said:

    "... the primary facts were not in dispute. The only
    "question was what was the proper inference from them.
    "That is a question of law with which this court can and
    "should interfere."

    - 17 -

    Similar observations occur in other reported cases. I agree with
    the proposition only if it means that an appellate court, whose
    jurisdiction is limited to questions of law, can and should interfere
    with an inference of fact drawn by the fact-finding tribunal which
    cannot be justified by the primary facts. I do not agree with it if
    it is intended to mean that, if the primary facts justify alternative
    inferences of fact, an appellate court can substitute its own
    preferred inference for the inference drawn by the fact-finding
    tribunal. I think this is clear from the tenor of the speeches in
    this House in Edwards v. Bairstow. The point does not seem to
    have been the subject matter of explicit pronouncement in any of
    the reported cases, at least your Lordships have been referred to
    none, and both propositions have from time to time emerged in
    judgments as a matter of assumption rather than decision. But for
    my part I have no doubt that the correct approach in this type of
    case, where inferences have to be drawn, is for the Commissioners
    to determine (infer) from their findings of primary fact, the
    further fact whether there was a single composite transaction in
    the sense in which I have used that expression, and whether that
    transaction contains steps which were inserted without any
    commercial or business purpose apart from a tax advantage; and
    for the appellate court to interfere with that inference of fact
    only in a case where it is insupportable on the basis of the
    primary facts so found. Accordingly I respectfully disagree with
    the learned judge in the instant case where he expressed the
    opposite view at page 2S7 b.

    The result of correctly applying the Ramsay principle to the
    facts of this case is that there was a disposal by the Dawsons in
    favour of Wood Bastow in consideration of a sum of money paid
    with the concurrence of the Dawsons to Greenjacket. Capital
    gains tax is payable accordingly. I would therefore allow the
    appeals. I agree that there should be no order for costs in your
    Lordships' House or in the courts below.

    - 18 -


BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII
URL: http://www.bailii.org/uk/cases/UKHL/1983/4.html