JTI Acquisition: the FTT casts a wide net on unallowable purpose

The long-awaited decision in JTI Acquisition on the availability of the motive defence under the loan relationship rules will be of interest to those advising corporates and private client practitioners concerned with motive defences in other areas. HMRC’s victory rested on a finding that the structure would have looked different if it had not been motivated by a reduction in UK tax. Pending any appeal, the terms of the FTT decision cannot be ignored. The judge was not swayed by the modest amount of the tax saving compared to the magnitude of the underlying commercial transaction.