Abstract In this article, the application of the UK doctrine of fiscal nullity by the Supreme Court is considered in light of the twin decisions in the cases of UBS AG v. IRC1 and DB Group Services (UK) Ltd v. IRC.2 This article argues that fiscal nullity is not a separate doctrine of taxation but can be explained in the way the facts are proven in a tax case, in the way that legal transactions are characterized and how the legislation is interpreted and applied. Using this as the conceptual framework of the paper, prior fiscal nullity cases have been analysed and decisions explained with a focus on different stages of the framework. UBS and DB Group Services findings relate to all three stages of the conceptual framework. Stage 1 requires that the court view the background ‘matrix of fact’ in a very objective manner. Stage 2 is the construction of the legal relations and the application of the statute particularly around the concept of ‘restricted security.’ Stage 3 concerns the purposive interpretation of ‘restricted security’ within the meaning of the legislation (section 425(2) ITEPA (UK)). Consequently, the decision in these two cases is not a departure from prior decisions.