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Interesting ss441, 442 unallowable purposes case

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Taxpayer lost. Looks correct to me, except I wish judges would stop using the "more than icing on the cake" = "main" test, as that has been misquoted out of context down the years.

“non-main” was often wrongly referred to in TiS cases etc. as “mere icing on the cake”. In IRC v Trustees of the Sema Group Pension Scheme [2002] STC 276 (in a passage later approved by the Court of Appeal), Lightman J said: ‘Obviously if the tax advantage is mere “icing on the cake” it will not constitute a main object ... The question where it is [a main object] is a question of fact … in every case.’  So clearly “icing on the cake” is not a correct test to distinguish "non-main" and “main” and in any event, obviously you cannot properly and correctly define something by what it isn’t (see also “cherries on cake” from Lewis v CIR [1999] STC (SCD) 349).

That said, I guess HMRC use it disingenuously, but then judges should always be alert to HMRC trying to pull the wool over their eyes, as their counsel has succeeded in doing in this case as above (although it would have unlikely changed the outcome here - especially considering paras 57, 98, 152(11) & 165 re the so-called "Tax Planning Matrix"). The footnote on page 1 is amusing as a classic "document swamping" litigation strategy.

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