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Humpty Dumpty tax

29 August 2007 / Simon McKie
Issue: 4123 / Categories: Comment & Analysis
HMRC's guidance on TCGA 1992, s 16A is misleading and dangerous to taxpayers and their advisers, says SIMON MCKIE


  • TCGA 1992 s 16A is likely to catch many ordinary tax planning transactions.
  • HMRC's relevant guidance is inaccurate. * The legislation should be amended to restrict it to artificial transactions.
  • Advisers cannot rely on the guidance.
  • Use of white space in tax return to disclose a loss that is not allowable under the relevant legislation.

'When I use a word' Humpty Dumpty said in a rather scornful tone 'it means just what I choose it to mean — neither more nor less'. Finance Act 2007 s 27 inserted a new s 16A into TCGA 1992 providing that a person's loss is not an allowable loss if:

'(a) it accrues to the person directly or indirectly in consequence of or otherwise in connection with any arrangements and
(b) the main purpose or...

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