In Mark Dunsby v HMRC [2020] TC7755, a tax scheme designed to transfer tax-free cash out of an owner-managed company fell foul of both the settlements and transfer of assets abroad rules.

HMRC raised an assessment and challenged the planning on the basis that:

The FTT found that:

The judge also amended the assessment increasing it to the sum of £200,000, that being the sum total extracted from the company.


This is a short summary of this case. This is the lead case in a number of similar appeals. It is listed for appeal. It will be interesting to see if the Upper Tribunal disagrees with the analysis.

Useful guides on these topics

Dividend index
This is an 'At a glance' index to dividends, for companies and their owners, with guidance from how to tax dividends to how to legally vote and pay a dividend.

Dividend tax
How dividends are taxed on individuals.

Shifting your income to avoid tax
What could possibly go wrong? A round-up of the rules that may catch out the unwary.

Disclosure of tax avoidance schemes (DOTAS)
What are rules on Disclosure of tax avoidance schemes (DOTAS)? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?

Settlement rules
What are the settlement anti-avoidance rules? How do these rules catch some common family tax planning? What are the rules for spouses and other family members?

Transfer of assets abroad
What are the ToA rules? When do they apply? Is there any defence against the rules?

External link

Mark Dunsby v HMRC [2020] TC7755