A tax-avoidance scheme that acted as a precursor to the Cup Trust has been challenged at a tax tribunal.
The Blue Box scheme was designed by NT Advisors, which devised the Cup Trust tax-avoidance scheme, a tax tribunal heard yesterday.
Over two years, the charity the Cup Trust received more than £176m from donors and paid out only £55,000 to charitable causes, but attempted to claim £46m in Gift Aid. Donors might have been entitled to claim another £54m in tax relief.
It used a model in which donors gave money to the charity, received almost the same value of money in government gilts in exchange and claimed tax relief on the whole.
The Blue Box scheme, which was created in 2004, is believed to have used a similar methodology and to have involved a Northern Irish charity called the Somerton Trust.
According to The Times newspaper, the scheme is understood to have been used by about 60 people to protect about £100m from tax.
According to a National Audit Office report into Gift Aid, published last month, HM Revenue & Customs is investigating 1,800 avoidance cases related to eight marketed tax-avoidance schemes that use reliefs on donations and could result in lost tax of £217m.
The tax tribunal hearing continues.