HMRC has foiled another charity tax avoidance scheme, leading to a
governmental overhaul of the rules governing relief for charitable donations.
The scheme is the latest arrangement the taxman has nipped in the bud after
the well-documented case against Vantis,
has seen two of its directors hauled to the High Court.
“It’s a new issue [separate from the Vantis court case] ,” an HMRC spokesman
“As and when we find them, we’re looking to close the loopholes, but every
barrier we put in place there will always be someone looking to get around that,
” the spokesman added.
The scheme exploits the relief available for donations of listed shares and
other types of qualifying investments such as land to charities and HMRC has
issued draft legislation
to counter it.
As part of the changes which are effective immediately, anyone gifting shares
to charities will only be able to claim relief on the lower of the acquisition
value of the shares, or the current market price.
This will foil schemes which buy shares at an artificially low price and then
sell the stock at a higher value, claiming tax relief, the government said
Stephen Timms, financial secretary to the Treasury branded the arrangement an
“artificial, aggressive and offensive tax avoidance scheme that seeks to abuse
those tax reliefs available for donations to charity.”
“This Government will not tolerate tax avoidance or tax evasion, and will act
promptly to tackle both of these, so I am today announcing changes to be made to
legislation, with immediate effect, to counter these schemes.”
More to follow.
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