Revenue and Customs Brief 41/07
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Issued 1 June 2007
At Budget 2007, HMRC announced that it would take forward the proposals in
the Review of Links with Large Business review (PDF 217K) (published in November
2006). The second proposal was:
The extension of existing clearances so that as normal business practice,
HMRC will provide businesses with their view of the tax consequences of
significant commercial issues whenever there is uncertainty.
Code of Practice 10, the guidance on clearances, says that where there is
genuine uncertainty about the meaning of the law HMRC will advise upon their
interpretation of legislation passed in the last four Finance Acts. The proposal
from the Review of Links with Large Business means that, by Budget 2008,
regardless of when legislation was enacted, HMRC will provide advice on the tax
consequences of genuine significant commercial issues.
Also announced at Budget 2007, was that during 2007/08, there would an early
extension of clearance work where there is genuine uncertainty regarding the
interpretation of tax legislation (without time limit) in two particular areas
of tax law:
* Stamp duty land tax from Royal Assent of Finance Act 2007; and
* Substantial Shareholding Exemption from 01 June 2007
Substantial Shareholdings Exemption (Schedule 7AC TCGA 1992)
Tax Bulletin 84 issued on the 25th August 2006, explained that with effect
from the granting of Royal Assent to Finance Act 2006 (19th July 2006) the Code
of Practice 10 (Information and Advice) facility was no longer available for the
purpose of the Substantial Shareholding Exemption. However, following the
announcement at Budget 2007, the facility will be reinstated from 1 June 2007.
The SSE pilot will test a new way of working within HMRC. In order to ensure
improved consistency for businesses seeking clearances, a structure has been put
in place to channel Code of Practice 10 applications relating to the Substantial
Shareholdings Exemption through a small number of specifically trained
individuals in Local Compliance or through Client Relationship Managers in the
appropriate sector of the Large Business Service. Businesses, and their
Practitioners, whose tax affairs are not normally handled by the Large Business
Service should in the first instance send applications to the HMRC Officer who
would normally deal with their tax affairs. For those companies whose tax
affairs are handled by a CRM in the LBS, they should submit applications to that
CRM as normal.
To assist HMRC in providing a prompt service, COP10 applications should be
marked on the envelope and on the covering letter with Compliance Code of
Practice 10 application Substantial Shareholding Exemption. There is more
information about circumstances in which HMRC offers the clearance service in
Code of Practice 10.
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Article Published/Sorted/Amended on Scopulus 2007-06-01 20:51:18 in Tax Articles