Tax avoidance measures

There will be changes to the 2004 disclosure regime for tax avoidance which are aimed at helping HMRC to detect and respond to tax avoidance quickly. This regime will be extended to all income tax, corporation tax and capital gains tax. Businesses that devise their own tax schemes will be required to disclose them within 30 days of their implementation, bringing them into line with commercial tax scheme promoters.

Various measures were announced to counter tax avoidance through companies creating artificial capital losses, stock lending, relief for corporate intangible assets and capital losses on disposals of rights conferred by certain insurance policies. Measures will also counter inheritance tax avoidance by the use of second-hand interests in foreign trusts, as well as the avoidance of tax on pre-owned assets. HMRC has said that it will monitor schemes for avoiding income tax and national insurance contributions on remuneration, especially during the bonus-paying season. Any ensuing legislation may be back dated to 2 December 2004.