REVENUE ; ;Tax avoidance series of transactions without pre-ordained outcome and lacking steps fulfilling no commercial purpose not deemed composite transaction ;Griffin (HMIT) v Citibank Investments Ltd: ChD (Patten J): ;2 November 2000 ;The Inland Revenue raised three assessments to corporation tax in respect of gains realised by the taxpayer under two option contracts purchased from a connected company in 1994. The taxpayer appealed, contending that the gains fell to be treated as capital gains rather than as profits chargeable to tax under Sched D of the Income and Corporation Taxes Act 1988. Special commissioners allowed the appeal. The Crown appealed. ;Graham Aaronson QC and Camilla Bingham (instructed by Ms Jane Westbrook) for the taxpayer. Christopher McCall QC and Michael Furness QC (instructed by Solicitor, Inland Revenue) for the Crown. ;Held, dismissing the appeal, that the special commissioners were required to determine whether there was a pre-ordained series of transactions, i.e. a single composite transaction, and whether that transaction contained steps inserted without any commercial or business purpose apart from a tax advantage; that the Crown had therefore to establish that the two option contracts were a single composite transaction; that the special commissioners finding that there was always the possibility of assigning one option before exercise meant that it could not be said that back in 1994 there was no practical likelihood of the pre-planned events not taking place; that, coupled with the fact that no steps lacking commercial purpose other than the mitigation of tax liability had been inserted into the series of transactions, meant that the two options were not a composite transaction; that the court could not go behind a genuine document or transaction to some supposed underlying substance and so could not ignore the terms of each option contract (which provided for its independent assignment and exercise) and concentrate on the fact that the options, exercised together, were guaranteed to produce a fixed return in favour of the taxpayer; and that, accordingly, the special commissioners had correctly set the assessments aside. ; ; ;