Carreras Group Ltd v Stamp Commissioner

Holding

A composite, pre-ordained series of transactions designed to fall outside a stamp duty charge could be viewed as a single transfer of shares attracting duty, applying the Ramsay principle of purposive statutory construction.

Facts

Carreras Group restructured by transferring shares in a subsidiary in exchange for debentures, which were then redeemed two weeks later. The arrangement was designed to fall outside the Jamaican Transfer Tax Act because it appeared to be an exchange of securities rather than a sale.

Reasoning

Lord Hoffmann, delivering the Board's advice, restated the Ramsay approach: legislation is to be applied to the facts viewed realistically. Where transactions are pre-ordained and one step has no commercial purpose other than tax avoidance, the court may look at the end result. The debenture leg was disregarded and the transaction was treated as a transfer of shares.