Salaried members: HMRC reverses position on the TAAR and Condition C

HMRC have said they will reverse their approach on the targeted anti-avoidance rule (TAAR) under the salaried members rules (ITTOIA 2005 ss 863A–863G) as announced in February 2024 in which the department said they would apply the TAAR where members made a top-up capital contribution in order to avoid meeting Condition C of the rules.

HMRC’s proposed approach was widely criticised with the CIOT saying that it was contrary to the policy intent behind the TAAR which was articulated as being ‘to counter abusive arrangements’ that ‘have no other substantive effect’.

‘We find it difficult to see how the making of a genuine capital contribution can be regarded as being abusive or has having no other substantive effect ’ the CIOT had said.

However in a recent statement made to the CIOT HMRC have now said:

‘HMRC’s position remains that...