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For those who are interested, this is an outline of my understanding of how the scheme was intended to work.
1. Scottish trusts sell to Irish trusts - not directly but by way of option arrangements.
2. Because the two sets of trusts were connected, a direct sale would be fixed at market value, bringing in the big CGT charge.
3. So instead, the sale went though by way of options being granted and exercised. At the time of these events, the market value rule would have been disapplied by TCGA 1992 s 144ZA;
4. The result was that the Scottish trusts would have been subject to CGT by reference to the actual price paid - which was minimal since the sale was at an undervalue;
5. But under Irish law, the Irish trusts would have been treated as having acquired the shares at market value;
6. Therefore the subsequent sale of the shares to Merrill Lynch - at market value - would have been tax free.
The case is here if anyone wants to read it all: