HMRC have published Brief 41/07, which concerns the substantial shareholdings exemption as announced in the 2007 Budget.

HMRC recently announced that they would be taking forward proposals to extend existing clearance procedures so that as normal business practice, they will provide businesses with their view of the tax consequences of significant commercial issues whenever there is uncertainty.

Code of Practice 10, the guidance on clearances, says that where there is genuine uncertainty about the meaning of the law HMRC will advise upon their interpretation of legislation passed in the last four Finance Acts. The proposals announced in Budget 2007 mean that, by Budget 2008, regardless of when legislation was enacted, HMRC will provide advice on the tax consequences of genuine significant commercial issues.

Also announced at Budget 2007, was that during 2007/08, there would an early extension of clearance work where there is genuine uncertainty regarding the interpretation of tax legislation (without time limit) in two particular areas of tax law, namely stamp duty land tax (from Royal Assent of Finance Act 2007), and the substantial shareholding exemption (SSE) under TCGA 1992, Sch. 7AC (from 1 June 2007).

The SSE pilot will test a new way of working within HMRC. In order to ensure improved consistency for businesses seeking clearances, a structure has been put in place to channel Code of Practice 10 applications relating to the SSE through a small number of specifically trained individuals in Local Compliance or through Client Relationship Managers in the appropriate sector of the Large Business Service. Businesses, and their Practitioners, whose tax affairs are not normally handled by the Large Business Service should in the first instance send applications to the HMRC Officer who would normally deal with their tax affairs. For those companies whose tax affairs are handled by a CRM in the LBS, they should submit applications to that CRM as normal.

To assist HMRC in providing a prompt service, COP10 applications should be marked on the envelope and on the covering letter with "Compliance – Code of Practice 10 application – Substantial Shareholding Exemption".

Link

HMRC: Brief 41/07 

Article Added Friday, 01 June 2007 | 1502 Hits

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