Partnerships loophole slammed shut
The government yesterday closed a tax avoidance loophole to address schemes which exploit relief for trading losses through partnerships.
Paymaster general, Dawn Primarolo, claims that some schemes manipulate partnership sharing arrangements to allocate losses that are greater than an individual’s economic contribution to a partnership to achieve a tax advantage.
‘These schemes exploit tax reliefs that are intended for people who risk their own money in running genuine businesses, but the schemes manipulate tax relief to create claims for losses in excess of the capital at risk,’ said Primarolo.
‘Schemes like this undermine the true purpose of tax relief and we are determined to take all appropriate action to counter them.’