The Budget included proposals for two changes to the double taxation relief targeted anti-avoidance rule (TAAR), in a bid to bring it into line with similar anti avoidance measures and to cut down on abusive arrangements
The first change removes the requirement for HMRC to issue a counteraction notice before the TAAR applies, and the second change slightly widens the scope of schemes or arrangements to which the double taxation relief TAAR can apply.
The first change regarding counteraction notices will have effect for returns with a filing date on or after 1 April 2018.
The second change, which affects total tax payable, will have effect for payments of foreign tax made on or after 22 November 2017.
Legislation will be introduced in Finance Bill 2017-18 to remove the requirement in section 81 TIOPA 2010 for HMRC to issue a counteraction notice, and instead require the taxpayer to consider whether the double taxation relief TAAR applies as part of the taxpayer’s self-assessment.
There will also be legislation to extend the reference in section 87 TIOPA 2010 to the total tax payable to include the tax payable by any connected persons for one of the categories of prescribed schemes or arrangements to which the TAAR can apply.
Policy paper Double taxation relief: changes to targeted anti-avoidance rule is here
Report by Pat Sweet
