SCHEDULES
SCHEDULE 18Serial tax avoidance
PART 4Restriction of reliefs
19Duty to give a restriction relief notice
1
HMRC must give a person a written notice (a “restriction of relief notice”) if—
a
the person incurs a relevant defeat in relation to arrangements which the person has used in a warning period,
b
the person has been given at least two warning notices in respect of other relevant defeats of arrangements which were used in that same warning period, and
c
the defeats mentioned in paragraphs (a) and (b) meet the conditions in sub-paragraph (2).
2
The conditions are—
a
that each of the relevant defeats is by virtue of Condition A, B or C,
b
that each of the relevant defeats relates to the misuse of a relief (see sub-paragraph (5)), and
c
in the case of each of the relevant defeats, either—
i
that the relevant counteraction (see sub-paragraph (7)) was made on the basis that a particular avoidance-related rule applies in relation to a person’s affairs, or
ii
that the misused relief is a loss relief.
3
In sub-paragraph (2)(c)—
a
the “misused relief” means the relief mentioned in sub-paragraph (5), and
b
“loss relief” means any relief under Part 4 of ITA 2007 or Part 4 or 5 of CTA 2010.
4
A restriction of relief notice must—
b
set out when the restricted period is to begin and end.
5
For the purposes of this Part of this Schedule, a relevant defeat by virtue of Condition A, B or C “relates to the misuse of a relief” if—
a
the tax advantage in question, or part of the tax advantage in question, is or results from (or would but for the counteraction be or result from) a relief or increased relief from tax, or
b
it is reasonable to conclude that the making of a particular claim for relief, or the use of a particular relief, is a significant component of the arrangements in question.
6
In sub-paragraph (5) “the tax advantage in question” means—
a
in relation to a defeat by virtue of Condition A, the tax advantage mentioned in paragraph 12(1)(a),
b
in relation to a defeat by virtue of Condition B, the denied advantage (as defined in paragraph 13(4)), or
7
In this paragraph “the relevant counteraction”, in relation to a relevant defeat means—
a
in the case of a defeat by virtue of Condition A, the counteraction referred to in paragraph 12(1)(c);
b
in the case of a defeat by virtue of Condition B, the action referred to in paragraph 13(1);
c
in the case of a defeat by virtue of Condition C, the counteraction referred to in paragraph 14(1)(d).
8
If a person has been given a single warning notice in relation to two or more relevant defeats, the person is treated for the purposes of this paragraph as having been given a separate warning notice in relation to each of those relevant defeats.