Taxation: Avoidance

Debate between Lord Strasburger and Lord Deighton

Wednesday 6th February 2013 Lords Chamber

[Lord Strasburger]

My Lords, can my noble friend tell the House whether alleged tax avoidance schemes, such as those operated by the Cup Trust, are likely to be caught by the general anti-avoidance rules when they are introduced? Can he also confirm that the general anti-avoidance rules are still scheduled to be introduced in this year’s Finance Bill?

[Lord Deighton]

I thank my noble friend for giving me the chance to shed further light on this issue. HMRC is extremely clear that circular schemes which are designed to exploit gift aid do not work in tax law. It will challenge and litigate enthusiastically against any scheme that it believes does not work in tax law. As the schemes do not work in tax law, the anti-avoidance provisions are not necessary and the schemes should fall at the first hurdle of not being legally acceptable. However, I can confirm that it is the Government’s intention to include the general anti-avoidance rules as part of the Finance Bill 2013.