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Disguised Interest & Purposive Drafting

Roger Muray Ernst & Young LLP welcomes the principles-based drafting approach in the draft provisions dealing with 'Financial Products Avoidance' but asks whether the current drafts meet with that ideal
In December HMRC issued a consultation document that included two new anti-avoidance provisions drafted using a purposive or 'principles-based' approach. The new clauses were designed to replace much longer prescriptively drafted legislation dealing with 'disguised interest' and 'transfers of income streams'. The idea was that the drafting approach would halt the game of cat and mouse where tax planners found ways round anti-abuse rules leading to sticking-plaster amendments which inexorably lengthened and complicated the Tax Acts. In her article in The Tax Journal 'Income in Disguise' 1 Sarah Luder outlined the proposals. In this article I will:

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