PBR 06: Brown closes six avoidance schemes
Chancellor uses disclosure measures to block avoidance
Gordon Brown has announced the closure of six tax avoidance schemes using the
disclosure regime introduced in the Finance Act 2004.
Legislation will target schemes that:
- See companies creat artificial tax losses by claiming exemption from tax on
annual payments paid by individuals; - See banks use authorised investment funds to avoid restrictions on claiming
double taxation relief; - Characterise unallowable payments as a fee;
- Use currency exposure in thinly capitalised companies to win tax relief;
- Use lease and leaseback of plant and machinery to gain tax relief on rent of
the machinery; - Use the shifting of profits offshore, before returning them to the UK, so
that a tax charge is not incurred.
The Treasury estimates that avoidance policies in the budget will see £110m
saved on 2006/07, £180m in 2007/08, £195m in 2008/09 and the same sum again in
2009/2010.