Tax avoidance scheme beaten in court
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14 November 2012 - HM Revenue
A marketed tax avoidance
scheme which claimed to license newspaper mastheads to avoid tax has
been successfully challenged by HM Revenue and Customs (HMRC) in court.
A marketed tax avoidance scheme which claimed to license newspaper
mastheads to avoid tax has been successfully challenged by HM Revenue
and Customs (HMRC) in court.
The decision has protected £5.6 million and potentially £104 million in
67 similar cases.
The Tribunal ruled that subsidiaries of Iliffe News and Media Limited
were not entitled to a tax deduction for payments they had made to
their parent company to use their own mastheads.
This is the latest in a series of Tribunal decisions in HMRC’s favour
which take forward the department’s commitment to create a level tax
playing field for all businesses.
Jim Harra, HMRC’s Director General for Business Tax, welcomed the
“This is an important ruling against a marketed avoidance scheme and
the latest in a series of successful HMRC challenges to such schemes.
We will continue to challenge artificial arrangements such as this in
the interests of the vast majority of businesses and people who choose
to play by the rules.”
1. Between 2003 and 2005 various trading subsidiaries of
the Iliffe News and Media group assigned unregistered trade marks
(mastheads) to the parent company and then licensed them back for a
fixed term in return for a lump sum payment.
2. The group claimed that the lump sum fee in the hands of the licensor
was within the Capital Gains regime and claimed that no gain, no loss
3. On the other side of the equation the trading subsidiaries claimed
that the grant of the licence was a new intangible fixed asset enabling
them to claim tax relief on the payments.
4. The legislation was changed in December 2005 to prevent this type of
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Article Published/Sorted/Amended on Scopulus 2012-11-26 09:41:57 in Tax Articles
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