Introduction Background Note
18.An Anti-Avoidance Simplification Review was launched at the 2007 Pre-Budget Report. The aim was to simplify anti-avoidance legislation whilst protecting tax revenues.
19.In July 2008, the transactions in securities legislation was identified as a candidate for simplification. This culminated in a set of proposals, including draft legislation to amend ITA, that were subject to public consultation in July 2009. This Schedule is the outcome of those consultations.
20.This Schedule provides for amendments to be made to the transactions in securities legislation. The existing legislation in ITA is replaced with simplified legislation that will ensure that all relevant transactions that involve tax avoidance are within its scope.
21.This is achieved by using a new narrower definition of an income tax advantage; by replacing the current definition of a “relevant company” with that of a “close company”; and by including a new exemption covering fundamental changes in ownership of shares in a close company.
22.This Schedule also amends CTA in relation to certain circumstances where the cancellation of a corporation tax advantage may arise in connection with a transaction in securities.