HMRC continues to target what it perceives as avoidance transactions utilising lease arrangements. The changes were announced in the December 2009 Pre Budget Report. In its December 2009 Technical Note HMRC stated that the proposed legislation was a response to the disclosure of two specific structures both of which had the intended effect of creating a permanent mismatch between commercial profit and taxable income and loss when viewed from a UK perspective. The legislation designed to counteract these arrangements is contained in FA 2010 Sch 5.
The legislation and its operation
The first 'scheme' targeted by Schedule 5 involved the establishment of an offshore leasing company. Whilst the leasing company was offshore income was stripped from the lease following which the company became UK tax resident and then subsequently incurred qualifying capital expenditure on the stripped...
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HMRC continues to target what it perceives as avoidance transactions utilising lease arrangements. The changes were announced in the December 2009 Pre Budget Report. In its December 2009 Technical Note HMRC stated that the proposed legislation was a response to the disclosure of two specific structures both of which had the intended effect of creating a permanent mismatch between commercial profit and taxable income and loss when viewed from a UK perspective. The legislation designed to counteract these arrangements is contained in FA 2010 Sch 5.
The legislation and its operation
The first 'scheme' targeted by Schedule 5 involved the establishment of an offshore leasing company. Whilst the leasing company was offshore income was stripped from the lease following which the company became UK tax resident and then subsequently incurred qualifying capital expenditure on the stripped...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
