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NEW RULES TO prevent what was seen as abuse of the capital loss rules came into effect from 5 December 2005 the date of the Pre-Budget Report. HMRC published a statement setting out the principles underpinning the new rules along with draft legislation and some guidance notes.
There was a brief period of consultation after which slightly revised legislation and guidance notes were issued on 22 March 2006.
HMRC statement
Most of the new rules arise from disclosures made to HMRC under the FA 2004 regime further demonstrating the efficacy of this regime. HMRC's information suggested that new ways were being found to circumvent existing anti-avoidance rules to gain access to capital losses and that the quantum of unused capital losses was increasing. As a result of the 'significant' tax risk in the area the Government acted to prevent further abuses 'in circumstances...
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