Finance Bill 2009: Anti-avoidance measure

The Financial Secretary to the Treasury (FST) has today Thursday 21 May 2009 made a written ministerial statement to Parliament announcing that an amendment to Finance Bill 2009 will shortly be tabled countering an avoidance scheme that has been disclosed to HMRC.

The scheme uses a trade reorganisation to exploit Corporation Tax (CT) rules which provide that losses, arising in a trade in the 12 months prior to its cessation, may be carried back and set off against profits made in the previous 3 years ('Terminal Loss Relief').

The amendment will propose legislation effective for reorganisations occurring on or after 21 May 2009.

The FST's statement, the draft legislation countering the scheme and an accompanying explanatory note can be found on the HMRC Finance Bill 2009 page.