Double taxation treaty passport scheme review - CIOT comments

6 Jul 2017

CIOT have made several submissions to HMRC expressing our concerns about the new clause, namely that we think it will lead to unintended consequences and create uncertainty for taxpayers undertaking commercial transactions. Most recently, we set out a number of examples which we think are suitable for guidance. The full details of our submission can be found here.

HMRC have now advised us that they have started to receive a number of clearance requests from taxpayers, despite there being no statutory clearance procedure under the new legislation. HMRC have confirmed that it is not their general practice to offer clearances on recently introduced legislation with a purpose test. However, they say that they recognise that this may cause some difficulty for taxpayers, particularly in the absence of guidance.

They have therefore drafted the attached standard reply that they will be using for all such requests for clearance which explains their position, but also tries to expand on their view of how the new rules work. They have also included a small number of examples. They say that this is not meant to replace the guidance, which they are still working on, but will hopefully be a useful aide memoire in the interim. We understand that the guidance, which should be published before the end of this year, will be much more detailed and will use more examples.

Technical Team