Clauses and catastrophes

Key points * Denial of tax relief for 'contrived losses'. * Life policies and the rebate of commissions. * New anti-avoidance measures relating to the exploitation of financial products. * Restrictions on the sale of leasing companies. * The acquisition of losses from corporate members of Lloyd's.

THE SIXTH SITTING of the Public Bill Committee which is debating the Finance Bill 2007 started with consideration of clause 27 'extension of restrictions on allowable capital losses'. The lobby notes explain this clause as follows.

'Clause 27 extends the effect of the provision introduced in FA 2006 that excluded losses generated as part of a tax avoidance scheme from the definition of an allowable capital loss for corporation tax purposes. It replaces the corporation tax provision with a provision that has the same effect for the purposes of capital gains tax and income tax as well as corporation tax....