New legislation to block a ‘contrived and aggressive’ income tax avoidance scheme involving property business loss relief will protect the Exchequer from significant losses, HM Treasury said.
The scheme, marketed to wealthy individuals, sought to use a series of ‘highly artificial’ transactions to generate tax relief from a property business owning agricultural land.
‘Although the land itself and the business owning it will exist, the transactions are not part of any genuine agricultural business. They are generated only to create an artificial loss that can be set off by users of the scheme against their other income to reduce their tax bill,’ the Treasury added.
Finance Bill 2012 measures will ‘prevent property business loss relief arising from tax motivated arrangements’ and ‘prevent post cessation property relief being used artificially to avoid tax’.
‘In general the [targeted anti-avoidance rules] will apply to payments made, and events occurring, on or after 13 March 2012,’ HMRC said in a Tax Information and Impact Note. However, changes to post-cessation trade relief with take effect from 12 January 2012 according to a draft explanatory note.
New legislation to block a ‘contrived and aggressive’ income tax avoidance scheme involving property business loss relief will protect the Exchequer from significant losses, HM Treasury said.
The scheme, marketed to wealthy individuals, sought to use a series of ‘highly artificial’ transactions to generate tax relief from a property business owning agricultural land.
‘Although the land itself and the business owning it will exist, the transactions are not part of any genuine agricultural business. They are generated only to create an artificial loss that can be set off by users of the scheme against their other income to reduce their tax bill,’ the Treasury added.
Finance Bill 2012 measures will ‘prevent property business loss relief arising from tax motivated arrangements’ and ‘prevent post cessation property relief being used artificially to avoid tax’.
‘In general the [targeted anti-avoidance rules] will apply to payments made, and events occurring, on or after 13 March 2012,’ HMRC said in a Tax Information and Impact Note. However, changes to post-cessation trade relief with take effect from 12 January 2012 according to a draft explanatory note.
