Examining the Revenue’s avoidance toolkit

Over the years the Inland Revenue has assembled a powerful toolkit of anti-avoidance provisions aimed at counteracting what it perceives as tax avoidance in financing transactions. In the second part of their article, Stephen Weston and Darren Docker of Arthur Andersen continue their guide to the different means of attack available to the Revenue.

Income to capital

Tax planning over the years has focused on turning otherwise taxable income into a non-taxable or capital gains form. Structures have been implemented on this basis for the external investment of surplus cash as well as creating capital/income mismatches on an intra-group basis.