Malcolm Finney highlights a case where a trustee had a narrow escape from a large and unexpected capital gains tax charge.
In Mackay v Wesley [2020] EWHC 1215 (Ch), the day of the decision of Meade J on 18 May 2020 was probably one of the luckiest days in the life of the claimant, Nicola MacKay. Why? Because she dodged a capital gains tax (CGT) liability of £1.6 million!
Not only did she dodge it, but it was her father, David Wesley (the defendant) who could be said to have caused the charge to arise on his daughter in the first place.
Tax avoidance scheme
The case concerned a ‘round the world’ tax avoidance scheme which was designed to mitigate substantial CGT liabilities arising on an Isle of Man family trust, the Ellen Morris 1990 Settlement. The scheme involved the trust becoming resident in Mauritius, thus avoiding a UK CGT
