Ramsay—reality and legal form
Ramsay—reality and legal form

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Ramsay—reality and legal form
  • Reality of the transaction and circularity
  • Ensign Tankers v Stokes
  • BMBF
  • Tower MCashback
  • Acornwood
  • Marathon Oil
  • Unrealistic possibilities
  • Astall
  • Blumenthal
  • More...

Lexis®PSL Tax is grateful to Nigel Doran of Macfarlanes LLP for his comments on an earlier draft of this Practice Note. However, the views expressed are those of Lexis®PSL Tax.

This Practice Note looks at some themes that have developed in cases in which the courts have applied the Ramsay principle in order to take a realistic view of the facts. For a general introduction to the Ramsay principle, see Practice Note: Ramsay as a guide to statutory construction.

The approach the courts have taken when applying Ramsay to transactions that involve a number of steps, designed to operate together to produce a particular tax result, is described in Practice Note: Ramsay and composite transactions.

This Practice Note looks at some further developments that have emerged as the courts have considered how this approach should apply in different circumstances. Specifically, it covers:

  1. reality of the transaction—whether a circular transaction should be entirely disregarded for tax purposes, or whether it can be taxed in accordance with its underlying reality

  2. unrealistic possibilities—whether purposive statutory construction requires the courts to ignore unrealistic possibilities when deciding whether the facts fit the statutory description

  3. interaction with other taxes—whether a Ramsay analysis could apply to a given set of facts for the purposes of one tax, but not another

Reality of the transaction and circularity

In the Ramsay case itself, and in other later cases

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