As widely expected, today’s Autumn Statement confirmed that anti-avoidance measures are to be introduced to counteract the use of corporate partners to reduce the income tax liabilities of individuals in partnerships. Very broadly, the Government’s concern is that individual partners have been reducing the amounts on which they are taxed at up to 45% (and … Continue reading Mixed member partnerships – targeting profit and loss allocation abuse
One of the more ominous announcements in the Budget was the launching of a consultation on tax avoidance through use of LLPs and partnerships. Partnerships and LLPs are well established structures for investment funds and business services, popular due to their flexibility and tax transparency. However, the Government is concerned that this flexibility has … Continue reading Partnerships and LLP anti-avoidance – HMRC’s latest target
This year’s Finance Act will include the new general anti-abuse rule (GAAR). This seeks to counteract tax advantages arising from “abusive” tax arrangements and is expected to come into force in July 2013. The draft legislation is supplemented by guidance notes which are vital to the understanding of the relatively short and conceptually unfamiliar GAAR … Continue reading New general tax avoidance rules: Government guidance provides comfort for some common corporate tax structuring
The Government is withdrawing income tax relief for payments of patent royalties by individuals to combat perceived abuse of these rules. The relief will be withdrawn for such patent royalty payments made from today onwards. This is in stark contrast to the introduction, from April 2013, of a new “Patent Box” regime for companies. The Patent Box regime will enable companies … Continue reading Patents: time to incorporate?
It must be unusual for a case on SDLT to make the front page of the FT but the decision in Vardy has achieved this distinction. Prior to the introduction of the general anti-avoidance rule (to be found at section 75A Finance Act 2003) SDLT avoidance was seen to be widespread. The fact that the … Continue reading SDLT: Vardy and the effect of sub-sales
The recent First-Tier Tribunal decision in the case of William Blumenthal throws light on a number of issues, in the context of a capital gains avoidance scheme. Economically, the taxpayer made a gain overall but for tax purposes sought to recognise a loss only. Essentially, the taxpayer sold shares in return for loan notes issued by a member … Continue reading William Blumenthal decision
A stamp duty land tax (SDLT) anti-avoidance scheme that has been widely used by residential purchasers has been stopped by measures announced in the Budget. The scheme broadly involved the purchaser granting an option simultaneously with completion of the acquisition of the property to an unconnected third party, exercisable many years in the future. The … Continue reading More on the sub-sale and other general SDLT anti-avoidance measures
Following recent publicity surrounding a certain UK bank avoiding tax on a purchase of own debt the odds could only have shortened on the introduction of a GAAR. But it might be that the die was cast somewhat earlier when the Court of Appeal found for the taxpayer in the case of Mayes. In the context of a highly engineered … Continue reading Towards a General Anti-Abuse Rule
The Government is persuaded that a general anti-avoidance rule should be introduced. This is proposed for 2013 following a further period of consultation.