Mark McLaughlin looks at a ‘hidden’ appeal route for taxpayers, which is not commonly known
The tax landscape is constantly changing, whether due to legislative changes, new case law or HMRC practice. One aspect of HMRC’s approach that has seemingly changed significantly in recent times is in connection with company reconstructions, and its response to some applications for statutory clearance on the tax effect of transactions such as share-for-share exchanges.
Capital gains tax clearances
For example, on a share-for-share exchange, the vendor shareholders will generally wish to avail themselves of the capital gains treatment in the Taxation of Chargeable Gains Act (TCGA) 1992 s 135 to prevent a ‘dry’ tax charge (i.e. a tax liability resulting from a sale of shares that generates no cash proceeds).