Copying and distributing are prohibited without permission of the publisher

Smallwoods lose out as leave to appeal in effective management case is refused

27 January 2011

The Supreme Court in London has refused the taxpayers in the Smallwood v HMRC dispute leave to appeal in a case that has implications for corporate taxpayers.

"This means that the case is now settled," said Andrew Watt, of Alvarez & Marsal – Taxand.

The importance of this dispute lies in the use of the tiebreaker place of effective management (POEM) test, which features in many double tax treaties of the UK for determining the place of residence of a trust or company.

In a split decision, the three judges of the Court of Appeal ruled in July last year that the UK/Mauritius double tax treaty did not provide protection from a UK capital gains tax charge that should have been incurred by the trust after the disposal of shares.

Using a 'round-the-world’ scheme, Mr and Mrs Smallwood claimed double taxation relief on the capital gain from asset sales during a year when the trustees of their family settlement were resident both in the UK and Mauritius, and there was no capital gains liability in Mauritius.

'Round-the-world’ schemes...



This article is locked content, available to current subscribers or trialists.

  • Current subscribers or trialists - Please log in to view this article in full.
  • New users - Please take a free 7 day trial.
  • Expired subscribers or trialists - Please subscribe to gain immediate full access.

If you think you've received this message in error, please contact your account manager, Nick Burroughs:
Email: nburroughs@euromoneyplc.com, Tel: +44 (0)207 779 8379

Subscribe now

Subscribe today to gain full access to International Tax Review.

Subscribe

Free trial

Take a free trial now and gain 7 days of full access to International Tax Review.

Free trial





International Tax Review Profile

RT @TPWeek: BREAKING: EC rules #Apple received up to €13 billion in illegal tax benefits from Ireland. https://t.co/A2bHdXsjCl' target='blank'>https://t.co/A2bHdXsjCl https://t.co

Aug 30 2016 10:15 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Japan and Panama signed a #TIEA on August 25.

Aug 29 2016 08:34 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Will the State Aid ruling on Apple cause tension between the US Treasury & Brussels at a precarious time for the EU?

Aug 29 2016 08:31 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @TPWeek: FT report that Apple face multibillion tax bill in EU State Aid ruling. https://t.co/I54GvcWWQf

Aug 29 2016 07:15 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @OECDtax: #Andorra #SaintKittsandNevis & #Senegal also further strengthen intl #tax co-operation today https://t.co/sjFP29nEQM https://t…

Aug 26 2016 08:47 ·  reply ·  retweet ·  favourite
International Correspondents