Taxpayers are entitled to organise their financial affairs in such a way that their tax burden is minimised. This perfectly legal activity is known as tax avoidance. Over the years tax advisors have shown great ingenuity in devising very complex and highly artificial tax avoidance schemes to exploit “loopholes” in the tax system. These schemes often result in a significant loss of tax revenues.
Recently David Cameron and his mother received press attention because Mrs Cameron had given her son two gifts of £100,000 each.
In an essay of approximately 1,800 words, briefly provide background on the inheritance tax planning scheme used by Mary Cameron, then discuss, using appropriate legislation and case law, whether or not you consider this scheme to be tax avoidance or tax evasion.
You may wish to discuss the DOTAS regime, whether or not this applies to this type of inheritance tax planning and if you feel that there is any way that HMRC can prevent blatant tax loophole exploitation. You can choose other areas for examples to illustrate your points.
The GCU library website has a Lexis Nexis site, which provides an excellent legislation and case law reference section.