Furniss V Dawson - Arguments

Arguments

The Dawsons argued:

1. that the CGT rule mentioned above worked in their favour and they could not be taxed until such time (if ever) as they sold their shares in Greenjacket Investments Ltd.; and
2. that the Ramsay Principle did not apply, since what they had done had "real" enduring consequences.

The tax authorities argued:

1. that Greenjacket Investments Ltd. only existed as a vehicle to create a tax saving;
2. that the effect of the transaction as a whole was that the Dawsons had sold the operating companies to Wood Bastow Holdings Ltd.;
3. that because the intervening stages of the transaction had only been inserted to generate a tax saving, they were to be ignored under the Ramsay Principle, and instead the effect of the transaction should be taxed; and
4. that the transaction being "real" (which is to say, not a sham) was not enough to save it from falling within the Ramsay Principle.

The Court of Appeal had given a judgement agreeing with the Dawsons on these points.