Drafting clearance applications

By Tolley

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Drafting clearance applications
  • Statutory clearances
  • Non-statutory clearances
  • Appeals against clearances
  • HMRC guidance
  • Statutory approvals

There are three main types of clearances available:

  • statutory clearances
  • non-statutory clearances, and
  • statutory approvals
Statutory clearances

Statutory clearances are clearance procedures provided for in the legislation. There are a number of statutory clearances available. Some of these are dealt with regularly by tax advisers and so these are covered in more detail below.

Clearances under the following provisions should be sent in a single letter to HMRC’s Clearance and Counteraction Team:

  • demergers ― see the Demerger clearances guidance note (CTA 2010, s 1091)
  • purchase of own shares ― see the Clearances and reporting guidance note (CTA 2010, s 1044)
  • EIS shares ― acquisition by new company (ITA 2007, s 247(1)(f))
  • transactions in securities ― see the Transactions in securities clearances guidance note (CTA 2010, s 748; ITA 2007, s 701)
  • share exchanges ― see the Paper for paper treatment guidance note (TCGA 1992, s 138(1))
  • reconstructions involving the transfer of a business (TCGA 1992, s 139(5))
  • transfer of a UK trade between EU member States (TCGA 1992, s 140B)
  • intangible assets ― see the Scope of intangibles regime guidance note (CTA 2009, s 831)

It should be made clear at the top of the letter which clearances are being requested. See below for guidance on where and how to send the clearance letter.

In order for clearances to be binding, HMRC must have been provided with all relevant facts. It requests that this is interpreted broadly and that anything which could be relevant should be disclosed. This includes, for example, events immediately before and after the main transaction in question.

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