• HMRC published on 17/Nov/15 an update to their “Seeking clearance or approval for a transaction”. While pre-transaction discussions with HMRC can be helpful no guarantee can really be offered one way or the other.
• As HMRC say “[they] will not give either formal or informal clearances that the GAAR [general anti-abuse rule] doesn’t apply. HMRC has always made it clear that no assurances about the tax treatment of a transaction will be given in any situation where, in HMRC’s view, the arrangements constitute tax avoidance.”
• So even after the fullest clearance discussions HMRC may change their minds or claim supposedly relevant facts were not revealed to them.
• Accordingly an approach for a taxpayer is to treat clearance discussions almost as an insurance in case of a later dispute. An opportunity to show that matters were put to HMRC beforehand.Of course any such discussions need to be fully documented and evidenced.
Tax Barrister, Accountant