Ramsay revisited: six principles

With the recent decisions of the Supreme Court in Hurstwood Properties and the Court of Appeal in Bostan Khan, the courts are again grappling with exactly what it means to construe statutory provisions purposively and what factors should be invoked in arriving at a realistic view of the transaction. The path from the decision in Ramsay to where we are now has not been straightforward, but in one sense we have come full circle: we have to look at the purpose of the relevant statute, identify the transactions as a whole and construe their legal effect in light of that purpose. Whilst that test is now clearer than ever, it does not necessarily provide taxpayers with certainty over their tax affairs, as the courts may reach different conclusions based on their realistic view of their facts and the purpose of the legislation.