Section 698: Counteraction notices
2086.This section is concerned with notices for the counteraction of income tax advantages. It is based on section 703(3), (9), (10) and (12) of ICTA.
2087.As explained in the note on section 692, section 698 similarly replaces references to “the Board” with references to “an officer of Revenue and Customs” (namely, the officer dealing with the case). See Change 5 in Annex 1.
2088.Subsection (1) lays down that the officer can serve a counteraction notice in two circumstances, namely if:
the person on whom a preliminary notification has been served has not exercised the right to make a statutory declaration in the time allowed; or
the person has exercised this right, but the tribunal has determined that there is a prima facie case for counteraction.
2089.Subsection (1), unlike the source legislation, makes it explicit that counteraction can proceed once the tribunal has determined that there appears to be a case for counteraction. This follows a dictum to that effect from Oliver J in Balen v CIR (1978) 52 TC 406(3) at page 408.
2090.Subsection (4) specifies the kinds of adjustment which a notice may require to be made, including an assessment.
[1978] STC 420.