HMRC closes leasing avoidance loopholes
Taxman cracks down on lease schemes that create artificial losses
The taxman has barred the use of two avoidance schemes involving leasing
schemes. The schemes emerged from disclosures made under the disclosure regime.
The first blocked scheme uses arrangements involving head leases and
subleases to create artificial tax losses. The schemes create a mismatch between
the tax treatment of rentals paid and received by the intermediate lessor.
The second type of scheme uses arrangements involving the grant of a lease
for a premium.
The counter-measures will take effect from 13 December 2007. A draft of the
legislation that will be included in the 2008 Finance bill has been drawn up.