On 27 June 2008, the High Court issued its judgment in the case of Astall v HMRC [2008] EWHC 1471 (Ch). This case concerned an attempt by taxpayers to structure securities as "relevant discounted securities" for the purposes of Schedule 13 to the Finance Act 1996 in order to create tax losses.

The High Court upheld the decision of the Special Commissioners that steps included in the transactions in order to satisfy the conditions for "relevant discounted security" status but that had no real possibility of occurring should be ignored. This meant that the securities, in reality, could not give rise to a "deep gain" and were not, therefore, "relevant discounted securities".

This case is a warning to taxpayers and their advisers of the dangers of inserting "artificial" steps into structures in order to achieve a certain tax treatment. The approach of the courts in this case has been fairly strongly to cut through such mechanisms and consider the reality of the transactions.