David Gauke (Exchequer Secretary, HM Treasury; South West Hertfordshire, Conservative)
The Government are committed to tackling tax avoidance to ensure the Exchequer is protected and fairness is maintained for the taxpayer.
Anti-avoidance provisions in clause 208 of the Finance Bill 2012 are being introduced to close tax avoidance schemes involving arrangements to acquire interests in offshore “excluded property” trusts, which are not subject to inheritance tax (IHT) charges. The schemes take advantage of this special treatment with the effect that UK domiciled individuals avoid IHT charges which would normally be due when they transfer assets into trusts.
Clause 208 may not be fully effective in deterring some variants of these schemes, particularly those involving arrangements using onshore vehicles. It may also inadvertently apply to some arrangements not made for tax avoidance purposes, especially those entered into prior to its introduction.
I am announcing today that amendments will be introduced at Report with the aim of ensuring that the new provisions: do not affect existing arrangements and are effective in stopping avoidance schemes involving the acquisition of interests in settled property; target the intended schemes correctly; and protect significant amounts of revenue. The amendment and provisions in clause 208 will have effect from today.