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Tax Avoidance Schemes

Volume 939: debated on Friday 25 November 1977

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asked the Chancellor of the Exchequer whether he will seek to amend the law so as to prevent schemes of the kind described in the Sunday Times of 9th October, marketed with the object of reducing tax by creating losses through partnerships of companies and individuals dealing in commodity futures.

I have read the Sunday Times article and I am aware of these schemes, under which arrangements are made for a partnership to be formed with the definite intention that a tax loss should arise and that the person for whose benefit the arrangements are made should then leave the partnership. The Revenue tells me that it does not recognise the ensuing claims as valid under existing law. However, its refusal to accept them will doubtless be contested and it could be some years before certainty is reached through the judicial process. To put the matter beyond doubt. therefore, the Chancellor will introduce appropriate legislation in next year's Finance Bill. He will be considering from what date legislation against a claim to loss relief contrived in this kind of way should be effective.