ABSTRACT
This chapter aims to ascertain whether the practice of analysing the taxpayer’s motive, intention and purpose was implanted within the UK’s tax system before the GAAR was introduced. In establishing whether there has been a move towards considering the taxpayer’s cognitive influences, it is necessary to examine the common law, where opinions as to acceptable and unacceptable tax avoidance have divided the judiciary. Until Ramsay, the applicable form of statutory interpretation was decided according to the clarity of the corresponding legislation. Judges could apply the literal approach without being accused of also observing what the taxpayers intended by their actions through studying disproportionate profit and losses. The substance over form doctrine was therefore dismissed due to the level of discretion involved, the inequitable results this approach would deliver. The desire to distinguish between cases involving one and many documents began as Ramsay involved a complex scheme with many documents, which was admittedly beyond the creative ambit of the average taxpayer.
