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Lack of a formal advance clearance procedure in the TAAR was adding to the uncertainty, said the CIOT
The Chartered Institute of Taxation (CIOT) is concerned that businesses undertaking commercial transactions will face uncertainty because of a lack of clarity about the breadth of a new targeted anti-avoidance tax rule (TAAR).
Clause 35 of Finance Bill 2016 introduces the rule for distributions of share capital made on winding up a company. The institute said the rule which is widely drawn could affect a range of legitimate commercial situations in which tax avoidance is not likely to be the motivating factor.
Lack of a formal advance clearance procedure in the TAAR was adding to the uncertainty said the CIOT. Business will have to use the wording of the legislation and HMRC’s guidance to decide whether the rule applies.
Tina Riches chair of the CIOT’s owner managed business sub-committee said: ‘As it stands without an advance clearance procedure it will be crucial that...
