Commentary

A7.221 DOTAS hallmarks—loss schemes

Administration and compliance

A7.221 DOTAS hallmarks—loss schemes

A7.221 DOTAS hallmarks—loss schemes

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 discusses the loss schemes hallmark. For an overview of the hallmarks and lists that show which hallmarks must be considered in different situations, see A7.215.

Application of this hallmark

This DOTAS hallmark prescribes 'arrangements' which involve the use of loss schemes that ensure losses arise to individuals2. For the definition of 'arrangements', see A7.205.

This hallmark applies where a promoter is involved and the arrangements provide an individual with a tax advantage relating to income tax or capital gains tax3. See A7.215.

This hallmark must be considered by the following persons when deciding whether the arrangements are notifiable for the purposes of a disclosure under DOTAS4:

  1.  

    •     the promoter of the arrangements (see A7.210), or

  2.  

    •     the user of the arrangements, where they are required to make the disclosure because either:

    1.  

      –     the promoter is exempt from making the disclosure due to legal professional privilege (see A7.213), or

    2.  

      –     the promoter is non-UK resident and has failed to disclose the arrangements (see A7.211)

The fact that the hallmark only applies to arrangements that ensure losses arise to individuals makes

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