Financial avoidance using Repos

Explanatory Statement

These notes supplement and explain the details of the draft legislation published on the HMRC website.

The Government has tabled legislation on 27 June 2006 to counter the effects of a recent Special Commissioners’ decision ( Bank of Ireland Britain Holdings Ltd v HMRC (SpC 544)) that a company was entitled to relief for a deemed manufactured payment that did not correspond to any economic loss incurred by the company. The legislation is to have effect from 27 June and is introduced as a report stage amendment to Finance Bill 2006.

The draft amendments (PDF 22K) have been prepared and published on the HMRC website. This note sets out the background to the amendments and provides explanatory notes on the detailed rules. Anyone with questions on the new provisions should contact

Richard Rogers
CT & VAT Products & Processes
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Telephone 020 7147 2625
Email Richard Rogers