Tax Avoidance Scheme disclosures – updated legislation
New legislation which targets tax avoidance came into effect on 1 January 2011. The legislation known as the The Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) (Amendment) Regulations 2010 amends the principal regulations.
The principal regulations prescribe the descriptions of tax schemes which certain persons, normally the promoters of schemes, are required to provide early information to HMRC. The amending regulations amend certain of the existing descriptions to improve their focus upon tax avoidance.
The two confidentiality descriptions and the premium fee description have been amended to remove weaknesses identified by HMRC. The premium fee description is amended to remove certain unnecessary disclosures. The off market terms description has been removed because HMRC consider that it is no longer necessary.
The principal regulations prescribe the descriptions of schemes required to be disclosed. There are currently 8 descriptions:
Description 1: Confidentiality where promoter involved
Description 2: Confidentiality where no promoter involved
Description 3: Premium fee
Description 4: Off market terms
Description 5: Standardised tax products
Description 6: Loss schemes
Description 7: Leasing arrangements
Description 8: Pensions