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The Finance Bill 2008 will introduce legislation that stops individuals
avoiding income tax by making manufactured payments. A manufactured payment
is a payment that is representative of interest or dividends payable on
securities, such as gilts or shares, which arise in the course of a sale and
repurchase, or stocklending arrangements.
Currently, individuals who make manufactured payments can obtain relief for
these payments against their general income, which has given rise to a range
of avoidance schemes. The new legislation will introduce a targeted
anti-avoidance rule that denies relief for any manufactured payment made as
part of a scheme or arrangements where one of the main purposes is to secure
a tax advantage.
Our view
This once again demonstrates HMRC’s determination to clamp down on what
they perceive as abusive tax avoidance strategies. |
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