A7.334 Serial tax avoidance—restriction of relief notices

Administration and compliance

A7.334 Serial tax avoidance—restriction of relief notices

A7.334 Serial tax avoidance—restriction of relief notices

In summary, if a taxpayer has, during the warning period, used three sets of arrangements which relate to the 'misuse of reliefs', HMRC must issue a 'restriction of relief' notice. The recipient of a relief restriction notice may then not make any claim for a relief during the restricted period. Where a company is treated as having been issued with a warning notice because another member of the corporate group had previously been issued with a notice, or because it is an associated person of the recipient, no account is taken of this notice in relation to a relief restriction notice1.

In detail, where a person has incurred three relevant defeats, each of which:


    •     is by virtue of conditions A, B, or C (see A7.331)


    •     relates to the misuse of a relief, and


    •     has been counteracted, on the basis that a particular avoidance-related rule applies in relation to a person's affairs (see below), or the misused relief is a loss relief2,

HMRC must issue a 'restriction of relief' notice, which must set out the effects of the restriction and the restriction period3.

For these purposes a relevant defeat relates to the 'misuse of reliefs' where the tax advantage in question (or part thereof) results from a relief or increased relief from tax, or where it is reasonable to assume that the claim for, or use of, a particular relief is a significant component of the arrangements in question4. The tax advantage in question

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial