CTM34420 - Residence: avoidance transactions: consent applications: report requested

ICTA88/S765 and ICTA88/S765A

The Treasury sends all applications to HMRC for their recommendations.

CT&VAT, International CT, examines the applications. In most cases it is possible to make a recommendation without reference to the District. In some cases the District is asked to make a report on the application. The purpose of the report is to obtain the Inspector's assessment of the real purpose of the transaction and its effect on the taxation liability of the company. It is important that the report should be as full as the circumstances allow.

Transactions affecting the commercial activities of the company may be held up pending the Treasury's decision. Treat a request for a report as urgent and reply at the earliest possible date. You should respect any 'commercial in confidence - named distribution only', markings.

On receipt of a report, check the application as far as possible with the information in the file or otherwise available and include the following information in the report:

• confirmation that the information given in the application is accurate, so far as can be checked, or details of any inaccuracies,
• particulars of any connection between the applicant company and any other company or person who may have an interest in or be in a position to influence the transaction,
• indications, if any, that the reasons given for the proposed transaction are not the real or sole reasons (that is, that there is an underlying tax avoidance motive),
• an independent estimate of the loss of tax likely to be involved if the proposed transaction is to be carried out,
• any other information not brought out in the application or covered above which has a bearing on the proposed transaction.

Do not make enquiries of the company especially for the purpose of the report.