Britain’s HM Revenue & Customs (HMRC) has won a tax tribunal against Jersey-based NT Advisors (NTA) over a tax avoidance scheme.
HMRC claims that this victory against NTA has saved the taxpayer around £190 million of tax.
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According to HMRC, the scheme- which NTA pushed to over 400 wealthy individuals – involved creating a massive loss on the sale of the shares, although the loss was only a paper one and would not expose the investors to any risk or economic downside.
NTA put together a series of loans and share transactions involving SG Hambros bank in the Channel Islands. They set up a company in the British Virgin Islands and sold shares in it to investors for millions of pounds more than they were worth. The money for the shares which Hambros had put up then passed through the company and straight back to the bank.
The users of the scheme were left owing money to offshore trusts created for their own benefit, so that it did not matter that they never actually paid for the shares.
In one case, more than £6 million worth of shares were sold for £552. The tribunal said: "The magic of the scheme was to ensure that, in the round, the participants did not make the kind of economic loss which one would normally associate with acquiring shares for £6 million and disposing of them for £552."
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By GlobalDataThe case was the third successive HMRC victory against tax avoidance schemes promoted by NT Advisors.
David Gauke, the Exchequer Secretary to the Treasury, said: "This was a highly complex avoidance scheme that was not worth buying into. HMRC will always challenge schemes like this so not only will investors have to pay the tax they owe, they will also have to pay interest; all this on top of the promoter’s fees.
"The government has made almost £1 billion available to HMRC to tackle the issues of avoidance, evasion and fraud and ensure that the minority who try to avoid their responsibilities pay the tax they owe."
