ABSTRACT
The majority of the dividend stripping cases examined did not give importance to the taxpayer’s motives. However, the cases on trading showed how, although motive is a badge of trade, the court also examined taxpayers’ purposes and intentions. The disparities in similar cases like Kirkham, Iswera and Reinhold demonstrate how examining the taxpayer’s motives, intentions and purposes can generate inconsistencies. The taxpayer’s motive, intention and purpose were predominantly examined in the cases supporting Ramsay. Supporters of the Westminster approach preferred to scrutinise Parliament’s intentions and apply the remoteness test, which examined how remote the end result was at the time of the intermediate transactions. The Canadian case of Lipson rightly criticised the term “abuse” for being too wide. Therefore, the test for abuse in the UK GAAR is subject to significant judicial discretion. Determining abuse has been stretched by the sub-tests which establish abuse. Judges can examine underlying policy considerations.
