HMRC v Redbox Tax Associates LLP

In HMRC v Redbox Tax Associates LLP [2021] UKFTT 293 (TC) (17 August 2021) the FTT approved HMRC’s application under FA 2004 s 314A for an order that the structures promoted by the LLP were notifiable arrangements under the disclosure of tax avoidance scheme (DOTAS) rules.

The scheme used paired forward contracts to purchase and sell securities. The outcome depended on the value of the FTSE 100 in a 10 to 15 day period with the aim of creating an allowable loss and a matching tax exempt gain. Because the outcome was uncertain users would repeat the transactions (in practice up to five times) until a material loss was generated. The LLP sold the scheme known as ‘Volatility’ mostly to tax advisers who then made it available to their clients.

The FTT considered each of the requirements for the existence of notifiable arrangements in FA 2004...

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