Sideways loss relief restricted

In light of a number of tax avoidance schemes using the sideways loss relief and double tax relief rules which have been notified to HMRC the financial secretary to the Treasury Stephen Timms announced details of legislation effective from 21 October 2009 to counter the schemes.

Sideways loss relief

A scheme generates losses in a professional partnership for offset by users of the scheme against their other income or capital gains by way of sideways loss relief.

As a result Mr Timms said that new legislation will prevent sideways loss relief being given in such circumstances. This test will not impact on loss-makers who have not entered into avoidance arrangements.

See here for more details.

Double tax relief

HMRC has been notified that unauthorised unit trusts are being used to avoid restrictions on double tax relief and to generate repayments of tax that...