Transactions in securities—clearances and administration
Transactions in securities—clearances and administration

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Transactions in securities—clearances and administration
  • Clearances
  • Effect of clearance
  • Single clearance application for multiple statutory provisions
  • Whether to apply for a clearance
  • Enquiries and counteraction notices
  • Income tax—enquiries and safeguards
  • Corporation tax—steps preceding a counteraction notice
  • Appeals

Transactions in securities—clearances and administration

This Practice Note covers the:

  1. clearance procedure, and

  2. administrative rules (enquiries, counteraction notices and appeals)

relating to the anti-avoidance regime affecting transactions in securities (TiS).

There are separate TiS rules depending on whether the potential avoidance relates to income tax or corporation tax. The procedure that taxpayers must follow to obtain a clearance is the same under both sets of rules, but the procedure that HMRC must follow to counteract a tax advantage is different.

For guidance on the practicalities of drafting and submitting a clearance, see Precedent: Clearance letter—TCGA 1992, ss 138 and 139(5), ITA 2007, s 701 and CTA 2010, s 748.

For an explanation of the circumstances in which the TiS rules apply, see Practice Note: Transactions in securities.

Clearances

Taxpayers can apply to HMRC for clearance that, in effect, the TiS rules (either the income tax or corporation tax versions) will not apply to a particular transaction (or transactions) that the taxpayer has entered into or is proposing to enter into.

HMRC has 30 days to respond by granting or refusing clearance, or by asking for more information. If it asks for more information the taxpayer has 30 days to provide it, after which HMRC has a further 30 days in which to grant or refuse clearance.

There is often a judgment to be made as to the best time to seek clearance. It

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