FA 2010 analysis – Sideways loss relief

This targeted anti-avoidance rule (or 'mini GAAR') prevents a loss made by a person carrying on a trade profession or vocation (whether in partnership or alone) from being off set against other income (including employment income) or capital gains earned outside the trade profession or vocation by way of sideways loss relief where the loss arises directly or indirectly from 'relevant tax avoidance arrangements'.

'Relevant tax avoidance arrangements' are arrangements to which the taxpayer is a party and the main purpose or one of the main purposes of which is the obtaining of a reduction in tax liability by means of sideways relief or capital gains relief. HMRC take the view that these include: (i) marketed tax avoidance schemes; (ii) arrangements with an objective which the parties involved might not ordinarily be expected to have; and (iii) transactions...