Quite wonderful from Ritchie

?He tells us to read this paper.

OK.

In the commercial world the structuring of transactions and the drafting of
transaction documents is indeterminate while the parties to a transaction and
their advisers develop a consensus about how they want to proceed. In all
but the simplest transactions tax will be a factor affecting this process, and so
the eventual transaction (even if it is perfectly innocent of any suggestion of
tax abuse) will in such cases constitute an implementation of tax advice. That
tax advice may be thought of as having led the transaction on a journey where
the starting point is the form the transaction would have taken absent the tax
advice and the end point is the actual transaction as implemented. That
journey is treated in this paper as taking place through a two-dimensional
space.

Ritchie’s the one who has told us that even asking for a tax opinion means that you’re trying to avoid tax. And yet here this paper, one he approves of, is telling us that everyone always asks for a tax opinion for every transaction and deal.

Sigh.

11 thoughts on “Quite wonderful from Ritchie”

  1. In keeping with this week’s zeitgeist, I felt the need to shout ‘Parklife!’ at the end of that quote.

  2. From personal experience this is totally true. I have been involved in numerous property transactions, sales and options, and tax is always considered when the deal is being drawn up. For example the most recent one was structured to occur within this tax year so as not to fall after the next election and open the parties up to political risk of adverse tax changes.

  3. And avoiding tax is bad because…?

    Not taking up smoking is avoiding tax. He may mean evasion, not avoidance, but the reptile (and others) have deliberately interchanged the two in general use to the point where most people think they are the same thing and only pedants point out the difference.

  4. Ritchie’s the one who has told us that even asking for a tax opinion means that you’re trying to avoid tax.

    He also says that tax compliance (which he regards as acceptable) is seeking to pay the right amount of tax in the right place at the right time. A layman would need tax advice for anything more than simple situations.

    Therefore in Murphy’s warped mind, being tax compliant (which is fine) is in many cases avoiding tax (which is not).

    @rse or cvnt? You decide.

  5. Even asking for an opinion is evidence of nascent tax avoidance?

    Well they’re the cunts who have written an insanely complicated tax code which is designed to ensure the layman will not live long enough to read it to the end, and therefore requires a whole class of highly paid savnts (for which read wankers) to interpret it for you and of course the more compex it is the more susceptible to arbitrary decisions in favour of HMRC.

    cunts all of them, hang the fucking lot. But especially Ritchie. Once he’s got over his gall bladder operation of course.

  6. The Murph has gone further and opined that even if you are fully compliant with both the wording and intent of tax law in the UK you can still be guilty of tax avoidance if the UK legislation in question is not to his liking.

    His ‘popularity’ resides solely in him saying what some people want to hear. Some people want to hear that all large companies are evil tax cheats and that if they say the right sort of prayer they will live for ever. Say those things and you will have followers.

  7. I have now read the paper. He justifies demonising tax avoidance by renaming the vast bulk of tax avoidance as “legitimate tax planning” and then drawing misleading graphs to suggest that this is a minority.
    He substitutes a scatter-graph with a single “curve” comprising two straight lines.
    His paper is an attempt to scare people by suggesting all avoidance except a small area of “legitimate tax planning” involves a risk that HMRC will take the taxpayer to court and win because the avoidance is not in accordance with the law. He separately talks of tax evasion being illegal …
    The next thing is he defines “the right amount of tax”: “The “‘right’ amount of tax” is the amount of tax you pay if you implement tax advice which eliminates risk or is risk-neutral, but do not implement tax advice which actually creates tax risk.”
    So Murphy’s pal wants us to believe that if you do your utmost to apply the tax rules as you understand them, which involves a “tax risk” because some of so badly drafted that the courts do not think that Parliament meant to have the results in law that they do, you are engaging in tax avoidance that merits opprobrium.
    Tax avoidance is anti-social behaviour. No, tax evasion is anti-social, burning cars in Brussels is anti-social, bullying those with disabilities is anti-social , slandering anyone who points out that Murphy has made a crass error is anti-social, pretending that the money you got paid for a political advert attacking legal tax avoidance is merely a loan from an offshore company is anti-social as well as deeply hypocritical, but to say a Deed of Arrangement that gifts part of an inheritance to charity (genuine charities, of course) is anti-social is “a sin against language” (a beautiful phrase which I do not pretend to have coined).

  8. Dear Mr Worstall

    “(even if it is perfectly innocent of any suggestion of
    tax abuse) “

    No transactions are ever innocent of tax abuse: the government is abusing us and all our transactions with taxes all the time.

    Doesn’t that nice Mr Murphy know that?

    DP

  9. An interesting conundrum along these lines: Stamp Duty is due on the transfer of shares at 0.5%, but Acquisition Relief exempts certain transfers. One of the criteria for Acquisition Relief is that the transaction is carried out for bona fide commercial purposes. In practice, HMRC’s Stamp Taxes people normally require you to have a letter from the Clearances unit stating that they consider your transaction to be bona fide for say Capital Gains Tax or Income Tax purposes.

    I have a client whose IT/CGT position is so crystal clear that to apply for clearance is completely pointless – there is no way HMRC would refuse it, and so waiting for clearance simply adds cost and delay. Except that we need Acquisition Relief, so we have to go for clearance anyway.

    So in effect we are asking HMRC’s opinion of whether a transaction is OK. If you adopt the “asking for advice is proof of avoidance” stance, we must therefore be in a potential tax-avoidance position – even though we are absolutely clearly not avoiding any tax at all, we are simply going through the hoops 🙂

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