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HMRC have added another section to their website’s Spotlights area, which focuses on tax avoidance arrangements the department believes do not work. The latest is, numbered 18, concerns stripped bond schemes.
The First-tier Tribunal ruled in the Revenue’s favour in Malcolm Healey TC2591 and Philip Savva TC2625, two cases involving similar products marketed by banks as investments.
HMRC have added another section to their website’s Spotlights area, which focuses on tax avoidance arrangements the department believes do not work. The latest is, numbered 18, concerns stripped bond schemes.
The First-tier Tribunal ruled in the Revenue’s favour in Malcolm Healey TC2591 and Philip Savva TC2625, two cases involving similar products marketed by banks as investments.
The banks sold at a discount sold bonds that had been stripped of their interest coupons. Clients would either sell the bonds back to the bank at a higher price or redeem them at maturity. The tribunal ruled in both cases that the profit was taxable income.
As a result of the taxman’s enquiries, most taxpayers who used the products agreed that the income they received was taxable and paid the tax due in full. Following the tribunal decisions, HMRC will seek full payment of the tax due plus interest from those yet to concede.
Taxpayers who have used such avoidance schemes and wish to minimise potential interest and penalties are invited to call the Revenue on 0161 261 3013 or 0161 261 2193.
