Tribunal ruling halts charity tax relief abuse
Another attempted abuse of the tax relief available when shares are gifted to charities has been blocked by a tribunal.
HM Revenue and Customs (HMRC) successfully challenged the tax avoidance scheme used by Nicholas Green and designed by Afortis Limited as part of an ongoing crackdown on charitable tax relief abuse. This and its impact on similar schemes could make sure over 拢35 million of tax is paid.
Under the scheme, shares were listed on the Channel Islands Stock Exchange at a value significantly more than their real worth. 皇冠体育app shares were then gifted to charity at the inflated value. 皇冠体育app scheme was designed to allow Mr Green to claim tax relief on the amount that the shares had been listed for, rather than on the much lower amount that the shares were worth.
皇冠体育app tribunal ruled that the relief claimed should be reduced significantly from that claimed by those using the scheme.
This latest decision follows HMRC鈥檚 defeat of another scheme using charitable reliefs, promoted by NT Advisors, at a tax tribunal last week.
Nicky Morgan, Financial Secretary to the Treasury, said:
皇冠体育app government wants to encourage more people to give to charity and has provided tax relief to incentivise this, but we will not tolerate abuse of the system. This case is further evidence of HMRC鈥檚 tough action to tackle tax avoidance schemes that seek to abuse charitable giving tax reliefs.
Taxpayers entering into these arrangements are not only damaging their own reputations, they are harming the reputations of charities that may not be aware they are being used to avoid tax. Anyone thinking of getting involved in a tax avoidance scheme does so at their risk and should know that HMRC will pursue them in collecting the tax that is due.