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Enabler penalties and legally privileged information

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The government has published the Penalties for Enablers of Defeated Tax Avoidance (Legally Privileged Communications Declarations) Regulations, SI 2017/1245, setting out the form and content of a declaration by a lawyer that information needed to establish that a person is not liable to an enablers penalty is legally privileged.

The new penalties for enablers of tax avoidance arrangements which HMRC later defeats contain safeguards to ensure that those who unwittingly enable abusive tax arrangements are excluded. Where a person would have to rely on a lawyer’s legally privileged communications to establish that they do not fall within any of the descriptions of activities that constitute ‘enabling’, the legislation provides that a ‘relevant lawyer’ may make a declaration to that effect.

The regulations come into force on 2 January 2018.