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Anti-avoidance consultation launched

10 December 2007
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Treasury explores possibility of replacing existing rules in two areas

A consultation document which explores the possibility of replacing existing detailed anti-avoidance rules in two areas with legislation, which applies a principles-based approach, has been published by the Treasury.

The two areas concerned involve disguised interest, where taxable interest is converted into exempt income or a capital gain, and sales of income streams, where taxable income is converted into something that may be treated by tax law as capital.

If the outcome of the consultation is positive, legislation might follow as early as Finance Bill 2008 to have effect:

  • in relation to transfers of income streams, for transactions taking place on or after 6 April 2008 (for individuals) or 1 April 2008 (for companies);
  • in relation to disguised interest, for income accruing on or after 1 April 2008.

Responses to the consultation should be sent by 28 February 2008 to:

Richard Rogers
HMRC
3rd Floor
100 Parliament Street
London SW1A 2BQ
Richard.Rogers@HMRC.gsi.gov.uk

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