Lancashire and others v HMRC

In Lancashire and others v HMRC [2020] UKFTT 407 (TC) (13 October 2020) the FTT considered a complex marketed scheme intended to enable the appellants to receive the majority of the income generated by the provision of their services to UK clients without attracting income tax and NICs.

Under the scheme each appellant established an Isle of Man settlement the trustee of which became a member of a partnership with the trustees of similar settlements. The partnership then entered into a services agreement with each appellant under which they agreed to provide services to UK third parties in return for a modest fee payable by the partnership. Each appellant also received as life tenant of their settlement their trustee’s share of the profits of the partnership. The appellants accepted that the fees were taxable...