Financial Products avoidance: Continuing consultation on principles-based legislation

The Government announced on Budget Day, 12 March 2008, that the introduction of principles-based legislation to tackle schemes involving disguised interest and transfers of income streams would be deferred to Finance Bill 2009 to allow more time for consultation.

Two documents will be issued in May setting out how this consultation is now to proceed.

The first document will cover transfers of income streams. The document will contain revised draft legislation and explain how this deals with matters that have been raised so far during the consultation.

The second document will cover disguised interest. Comments from respondents suggest this part of the work is likely to require more input than the transfer of income streams aspect. The document will summarise responses and include ideas intended to address concerns about the scope and effect of the legislation.

Both documents will include the provisional timetable for the continuing work on these measures and explain what form the consultation will take.