A7.203 DOTAS—meaning of tax advantage
The disclosure of tax avoidance scheme (DOTAS) rules require certain persons, usually promoters of schemes, but also users in certain circumstances, to provide HMRC with information about schemes falling within certain descriptions, known as 'hallmarks'. The person must tell HMRC how the scheme is intended to work, usually within five days of the date the scheme is made available to any person.1
For an overview of the DOTAS regime, see A7.202.
This article considers the meaning of 'tax advantage', 'national insurance contributions advantage' and the taxes to which DOTAS applies.
Notifiable proposals or arrangements
Arrangements or proposals are notifiable under DOTAS (see A7.205–A7.206) if2:
• they fall within any of the prescribed 'hallmarks' (see A7.215 for income tax, corporation tax, capital gains tax, national insurance contributions and apprenticeship levy and see below for inheritance tax and annual tax on enveloped dwellings)
• they enable, or might be expected to enable, any person to obtain a tax advantage (or national insurance contributions advantage if appropriate), and
• the main benefit, or one of the main benefits, that might be expected from the arrangements is the tax advantage (or national insurance contributions advantage if appropriate)
See below for the taxes to which DOTAS applies.
In relation to the second bullet point, this was considered in Redbox Tax Associates3. The arrangements in this case used paired forward contracts to purchase and sell securities. The outcome depended on the value of the FTSE 100 in a 10–15 day period with the aim of creating
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