TaxCorporate TaxBristol & West tax avoidance plan scuppered

Bristol & West tax avoidance plan scuppered

Upper tribunal rejects avoidance scheme using discrepancy between two regimes

Bristol & West tax avoidance plan scuppered

A £27M TAX AVOIDANCE ARRANGEMENT used by the former Bristol & West building society has lost an appeal in the upper-tier tribunal.

The tribunal said that Bristol & West transferred interest rate swaps to another Bank of Ireland subsidiary purely in the hope of securing a tax advantage. A further £215m was protected when other followers of the plan settled before being taken to tribunal.

Bristol & West transferred interest rate swaps from one group company to another for £91m. They sought to take advantage of a change in the regime for taxing derivatives, wrongly believing the credit would disappear because one of the companies involved in the interest rate swaps was within the new regime, while the other was not. The plan was designed to exploit that asymmetry.

David Gauke, Exchequer Secretary to the Treasury, welcomed the outcome: “This case is the result of HMRC’s relentless work against a highly complex and speculative avoidance gamble that, unchallenged, would have deprived the country of over £27m in corporation tax.

“HMRC has shown that, no matter how complex or intricate the case is, it will not hesitate to litigate when the rules are being abused.”

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

1m Alia Shoaib, Reporter
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

8m Shereen Ali, Deputy Editor
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

2m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

2m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

4m Alia Shoaib, Reporter