Budget 2010 – Transactions in securities
The existing anti-avoidance legislation dealing with transactions in securities to obtain an income tax advantage is to be replaced with new legislation targeting arrangements involving tax avoidance.
The main planned changes are as follows:
The new legislation will apply to securities in close companies including overseas companies;
The introduction of a new legislation defining how the tax advantage is to be quantified;
Certain transactions involving “dividend stripping” will be removed from the legislation as avoidance opportunities have been removed;
The measure will generally have effect for transactions where the tax advantage is obtained on or after 24 March 2010. Some aspects of the measure affect the Corporation Tax Act 2010 and will have effect at the same time as that Act. These changes could impact the tax consequences that follow from use of ESC C16 when a company ceases to trade.