Coinciding the with Chancellor's Pre-Budget Report, the Inland Revenue has announced that it is taking measures, including legislative changes, to stop various tax fraud and tax avoidance schemes. The measures introduced by the Finance Act 2004 provide the government with early warnings of new avoidance schemes, allowing the relevant departments to respond quickly with either litigation or new legislation.

Among the various schemes that have been closed down are:

• securities schemes that involve insurance contracts, or that take advantage of loopholes relating to securities that have restrictions or rights of conversion placed on them, or schemes involving benefits from employment-related securities.
• schemes used by companies to avoid tax on debt securities by manipulating "repo" and stock lending arrangements
• a scheme to avoid income tax involving corporate bonds which have had their interest payments removed ("stripped corporate bonds")
• schemes that avoid the Controlled Foreign Company rules by the artificial diversion of profits from the UK
• schemes that seek to exploit the double taxation relief and annual payment rules to increase the amount of relief due.
• schemes that abuse of tax reliefs for UK film production.

Discuss this news item in the PayPerShop Forum

...back to 3 December 2004


Sources:
www.inlandrevenue.gov.uk/pbr2004/pn03.htm
www.inlandrevenue.gov.uk/pbr2004/sup_itepa.pdf
www.inlandrevenue.gov.uk/pbr2004/pmg-statement.pdf
www.inlandrevenue.gov.uk/pbr2004/dtr_sup.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_life_co.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_ta_film.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_stripped_bonds.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_fin_avoidance.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_cfc.pdf
www.inlandrevenue.gov.uk/pbr2004/sup_chargeablegains.pdf