| 29/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 35 |
Decided on 8 April 1960 |
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Where An Annuity Contract Which Was Giving Rise To A Tax Liability Was Effectively Rescinded, The Revenue Could Not Claim That This Was An Artificial Or Fictitious Transaction Which Had To Be Disregarded Under Anti-Avoidance Provisions
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The case was actually taken to the Court to clarify the decision delivered by the Board. There was no question between the parties as to how the Board's decision should be given effect to, and revised assessments had been issued accordingly. The Court felt that, in the circumstances, a recourse should have been made to the Board in accordance with the provisions of the code of Organisation and Civil Procedure, and declared the appeal null and void. Since no question was raised either by the parties, or ex officio by the Court, the Board's decision may to taken to have been confirmed at the level of the Court of Appeal.
The subject matter of the controversy between the parties had been whether the recession of a contract of annuity, specifically made to avoid the double taxation of the amounts payable in both the payer's and payee's hands, had succeeded in achieving its declared aims or whether the transaction fell foul of anti-avoidance provisions and should be ignored. The Board held that once the recession of the contract had been carried out according to legal procedures, and once in fact the recession had been given effect to, the Revenue were not entitled to claim that they should go on taxing the annuity in the former recipient's hands as if nothing had happened.
BSC Case No: 41/59
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