It is not quite right to say tax avoidance is legal. It is more accurate to say it is not illegal – which is not quite the same thing.
It is in effect looking for loopholes or manipulating the rules to gain an outcome the legislation did not intend. It isn’t illegal but it is sneaky.
HMRC will take what it believes are the worst cases to tribunal – but that is expensive and not guaranteed to succeed. In practical terms, a lot of tax inspectors will shake hands on what they can get, figuring that getting something is better than risking getting nothing.