Structures were notifiable arrangements under DOTAS

HMRC applied for an order under FA2004 s 314A that the structures described as Volatility were notifiable under the disclosure of tax avoidance schemes (DOTAS) regime

Under the scheme users simultaneously entered into forward contracts to purchase and sell securities. The price payable depended on the value of the FTSE 100 in a ten to 15 day period. The aim was to create a loss and a tax exempt gain. The loss could be set against other income. Users entered into between one and five transactions until a loss was generated.

The respondent sold the scheme mainly to tax advisers who then recommended it to clients.

The First-tier Tribunal agreed that the sequence of paired contracts amounted to arrangements within s 318. All participants continued until they made tax losses.

On whether the arrangements resulted in a tax advantage (s 306(1)(b)) the tribunal found this was the case....