Avoidance not evasion!! Arrgghh grinds my gears this one

Evasion is consciously not paying tax which you know to be due. It's dishonest. There's NO WAY Rayner is an evader.

Avoidance is taking steps to reduce your tax burden, believing (rightly or wrongly) that those steps are legal and that their effect is that you genuinely don't have to pay the tax.

Some avoidance is totally mainstream, like investing in an ISA or a VCT. It's a government approved way of avoiding tax, for the perceived social benefit of encouraging the investment.

But clever tax lawyers and accountants then look at the legitimate avoidance methods and try to turbo charge them to produce a tax benefit which parliament never intended.

A classic example is the film schemes which many footballers invested in. The intention was to encourage investment in the British film industry by creating tax breaks for investors. A whole tax avoidance industry then grew up around that simple intention, with advisers creating more and more elaborate and artificial schemes designed to create massive tax advantages while taking no risks.

Going back to Rayner, she might just have been careless (failing to tell her conveyancers that she was a trustee of a house held for a minor). But she might be an avoider in that she decided to take two separate but linked steps with the intention of reducing her stamp duty bill.

Step A - sell her 25% interest in the house to her child's trust.

Step B - use the cash she's extracted from the trust to part fund the purchase of what is in reality a second home, but being able to tell the conveyancer with a straight face that she doesn't own another property (because of Step A).

She may have dreamt that up herself or someone may have suggested it to her. But if that was how it worked ("I'll take Step A in order to produce the benefit at Step B") then it's classic avoidance, regardless of whether it worked or not.

It's no different from MPs "flipping" their main residence choices to benefit from CGT advantage. User Posted Link Kitty Ussher did that on the advice of her accountants eg and had to resign User Posted Link

Posted By: Old Git on September 5th 2025 at 09:52:38

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