Tories fight tax avoidance legislation

The Conservative party has challenged parts of the government’s finance bill,
in a parliamentary battle over retrospective taxation.

The bill contained plans to shut down a tax avoidance scheme used by hedge
fund managers to extinguish tax liabilities. It proposes shutting down the
scheme from 1 January 2009, when the Treasury first announced it would tackle
the issue.

Backdating the legislation would ensnare a group of wealthy people who used
the scheme and would find they now have to pay tax, reports the Financial Times.

Hedge fund clients who use the scheme included entrepreneurs, financiers and
property specialists who typically pay up to £50,000 to reduce tax on income of

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