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Principles-based tax legislation may turn out to be the most enduring legacy of the Finance Act 2009, argues MIKE TRUMAN
KEY POINTS
- Transfer of income streams and disguised interest covered by principles-based legislation.
- Broad statement of principle taxes substance over form.
- Exclusions for legitimate transactions.
- Will purpose clauses be included again after final consultation?
Forget the 50% tax rate and the restriction of pension tax relief for those earning over £150 000 forget the changes to capital allowances forget even (deep breath…) the taxpayers charter although we certainly will return to that subject in the coming weeks.
The two most important Budget Notices may well turn out to be BN36 Transfers of Income Streams and BN37 Disguised Interest.
That’s not because of the subjects that they cover important though they are: it is because of the principles-based approach that they take.
The traditional approach to tax avoidance is to block each...
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