Tax Avoidance and Evasion - Revision history

Ruth Shaw: /* Finance Act 2026 reforms */

2026-08-05T09:34:19Z

‎Finance Act 2026 reforms

Ruth Shaw at 09:33, 5 August 2026

2026-08-05T09:33:59Z

Ruth Shaw at 07:58, 7 August 2025

2025-08-07T07:58:13Z

Ruth Shaw at 07:55, 7 August 2025

2025-08-07T07:55:39Z

Ruth Shaw: /* Fraudulent tax reclaims */

2024-08-27T11:06:00Z

‎Fraudulent tax reclaims

Ruth Shaw: /* "Avoidance": Extracting value from charity */

2024-08-27T11:05:46Z

‎"Avoidance": Extracting value from charity

Ruth Shaw: /* Avoidance by QIDR */

2024-08-27T11:05:30Z

‎Avoidance by QIDR

Ruth Shaw at 11:04, 27 August 2024

2024-08-27T11:04:19Z

Show changes

Ruth Shaw at 16:19, 12 April 2024

2024-04-12T16:19:14Z

Ruth Shaw at 11:54, 11 October 2023

2023-10-11T11:54:22Z

← Older revision		Revision as of 09:34, 5 August 2026
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	These reforms substantially reduce the scope for promoters to argue that avoidance arrangements fall outside the legislation because tax avoidance was not their dominant purpose. Instead, greater emphasis is placed upon the economic outcome of the arrangements.		These reforms substantially reduce the scope for promoters to argue that avoidance arrangements fall outside the legislation because tax avoidance was not their dominant purpose. Instead, greater emphasis is placed upon the economic outcome of the arrangements.
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	==Avoidance by QIDR==		==Avoidance by QIDR==

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 The reader wondering what the successful schemes were, or how they succeeded, is left unsatisfied.  But we can give some examples of unsuccessful schemes.
 ==Avoidance by QIDR==
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 This seems to be a (slightly garbled) version of the scheme in <i>Ferguson v HMRC.</i><ref>[2014] SFTD 934.  This was known as the "Blue Box" scheme.  The name seems to be arbitrary, though we should be grateful to any reader who can explain it.</ref>  In essence:
-(1)  A charity enters into a contract with a (non-charitable) trust on terms that if an individual gives a gilt to the charity, the trust may purchase it for 1% of its value.
+(1)  A charity enters into a contract with a (non-charitable) trust on terms that if an individual gives a gilt to the charity, the trust may purchase it for 1% of its value.<br/>
+(2)  The individual gives the gilt to the charity.<br/>
 (2)  The individual gives the gilt to the charity.
-−
 (3)  The option is exercised.

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 ''Users may [[contribute to the text]].  If you see anything that needs correcting or expanding, please click on the edit link and make the corrections.  A copy of the next edition of the book will be given to the user who makes the most edits.  User contributions are reviewed by [https://www.taxchambers.com/team/shanze-shah/ Shanzé Shah]''
-For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf  Chapter 2 Tax Avoidance and Evasion]
+For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf Chapter 2 Tax Avoidance and Evasion]
 ==Avoidance, abuse, evasion==

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 (2)  A tax avoidance purpose does not prevent what would otherwise be a charitable body from being a charity.
-<i>Campbell v IRC </i>45 TC 427 was such a case.  Moreover, the charitable expenditure rules clearly assume that a payment made with a tax avoidance motive may be an application for charitable purposes.<ref>See [[Charitable Expenditure Rules#Tax avoidance condition | Tax avoidance condition]].  See too <i>Altus Group v Baker Tilly </i>[2015] STC 788 at [124](2):
+<i>Campbell v IRC </i>45 TC 427 was such a case.  Moreover, the charitable expenditure rules clearly assume that a payment made with a tax avoidance motive may be an application for charitable purposes.<ref>See [[Charitable Expenditure Rules#Avoidance condition | Avoidance condition]].  See too <i>Altus Group v Baker Tilly </i>[2015] STC 788 at [124](2):
 :"...expenditure does not fail the 'wholly and exclusively' test simply because the taxpayer has arranged its business in a manner specifically and deliberately designed to involve deductible expenditure. ... many companies structure their affairs in ways specifically designed to be tax-efficient; this is not usually taken to indicate duality of purpose as regards section 54 CTA 2009 [expenses incurred wholly and exclusively for trading purposes]."</ref>

← Older revision		Revision as of 11:06, 27 August 2024
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	:Fraudsters have targeted Gift Aid relief paid to charities. Unlike other reliefs on donations, Gift Aid claims from charities generate a cash repayment rather than reducing a claimant's tax liability.		:Fraudsters have targeted Gift Aid relief paid to charities. Unlike other reliefs on donations, Gift Aid claims from charities generate a cash repayment rather than reducing a claimant's tax liability.
−
	:2.5 HMRC have identified a number of ways in which fraudsters may operate. They may set up charities to facilitate fraud or hijack the details of a charity. They may then falsify donations in order to try and generate a repayment of Gift Aid relief. Fraudsters have also attempted to change the bank details of genuine charities held by HMRC by claiming to represent the charity. This would allow them to redirect payments of Gift Aid to a bank account they control.		:2.5 HMRC have identified a number of ways in which fraudsters may operate. They may set up charities to facilitate fraud or hijack the details of a charity. They may then falsify donations in order to try and generate a repayment of Gift Aid relief. Fraudsters have also attempted to change the bank details of genuine charities held by HMRC by claiming to represent the charity. This would allow them to redirect payments of Gift Aid to a bank account they control.

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 (1)  They involve a breach of charity law for which there are charity law remedies:
 :(a)  the trustees can be required to reimburse the charity;
 :(b)  The Charity Commission can appoint new trustees
 (2)  They involve an application of funds for non-charitable purposes so tax reliefs are lost.

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 :<i></i>1 The scheme user buys £10,000 worth of shares in a company that are valued at 10p each.
 :2 The promoter floats the company on a stock exchange, manipulating trading activity to inflate the value of each share to £1.
 :3 The scheme user gifts their shares to a charity, stating a value of £100,000. In practice, the real value of the shares is much lower.
 :4 The scheme user then claims relief from HMRC on the £100,000 donation to charity [ie on the gift of shares whose value was claimed to be £100k].
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 :1 The promoter provides a scheme user with an interest free loan through an offshore trust.
 :2 The user buys gilts that they then donate to the charity. Gilts are not subject to capital gains tax.
 :3 The charity receives a fee for participating in the scheme. It sells the gilts at a fraction of market value to the offshore trust, which cancels the loan to the scheme user.
 :4 The scheme user claims relief on the value of the £100,000 donation.

← Older revision		Revision as of 16:19, 12 April 2024
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−	''Users may [[contribute to the text]]. If you see anything that needs correcting or expanding, please click on the edit link and make the corrections. A copy of the next edition of the book will be given to the user who makes the most edits. User contributions are reviewed by [https://www.taxchambers.com/team/~~rebecca~~-~~sheldon~~/ ~~Rebecca Sheldon~~]''	+	''Users may [[contribute to the text]]. If you see anything that needs correcting or expanding, please click on the edit link and make the corrections. A copy of the next edition of the book will be given to the user who makes the most edits. User contributions are reviewed by [https://www.taxchambers.com/team/shanze-shah/ Shanzé Shah]''

	For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf Chapter 2 Tax Avoidance and Evasion]		For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf Chapter 2 Tax Avoidance and Evasion]

← Older revision		Revision as of 11:54, 11 October 2023
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−	''Users may [[contribute to the text]]. If you see anything that needs correcting or expanding, please click on the edit link and make the corrections. A copy of the next edition of the book will be given to the user who makes the most edits. User contributions are reviewed by [https://www.taxchambers.com/team/~~jon~~-~~selous-borlace~~/ ~~Jon-Selous Borlace~~]''	+	''Users may [[contribute to the text]]. If you see anything that needs correcting or expanding, please click on the edit link and make the corrections. A copy of the next edition of the book will be given to the user who makes the most edits. User contributions are reviewed by [https://www.taxchambers.com/team/rebecca-sheldon/ Rebecca Sheldon]''

	For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf Chapter 2 Tax Avoidance and Evasion]		For this chapter in pdf format click here: [https://toc.wiki.anarres.org/images/c/cd/ToC_02_Tax_Avoidance_and_Evasion_%281%29.pdf Chapter 2 Tax Avoidance and Evasion]