Market leading insight for tax experts
View online issue

Treasury blocks post-cessation relief scheme

printer Mail

A tax avoidance scheme involving post-cessation trade relief under Income Tax Act 2007 s 96, which provides relief for certain payments made or events occurring after a trade has ceased, is to be blocked with effect from 12 January.

A tax avoidance scheme involving post-cessation trade relief under Income Tax Act 2007 s 96, which provides relief for certain payments made or events occurring after a trade has ceased, is to be blocked with effect from 12 January.

Finance Bill 2012 will prevent relief being given where a qualifying payment or qualifying event arises from ‘arrangements entered into in which the main purpose, or one of the main purposes, is to obtain a tax reduction’, said David Gauke, the Exchequer Secretary.

According to a draft explanatory note, the government has become aware of avoidance activity that ‘relies on creating contrived costs’ in order to claim the relief, putting at risk ‘substantial amounts’ of tax.

EDITOR'S PICKstar
Top