Finance Act 2022

Claim for relief

7 (1) This paragraph applies to a person who is liable to tax as a result of paragraph 5 if the person can demonstrate that the potential benefit to the person in connection with the taking of disqualifying steps is less than the amount to which the person would otherwise be liable to tax.

(2) References in this paragraph to the potential benefit to the person are to the maximum amount or value by which the person has or could have benefitted, or could benefit, in connection with the taking of those steps, which may (for example) include by—

(a) receiving, or being entitled (whether absolutely or conditionally) to receive, any amount in connection with the taking of the steps;

(b) being entitled (whether absolutely or conditionally) to any assets, or distribution out of assets, whose value is affected by the taking of the steps;

(c) being a person in respect of whom a power or other discretion may be exercised resulting in the receipt of any such amount, assets or distribution;

(d) disposing of, or being able to dispose of, any such assets.

(3) A person to whom this paragraph applies may make a claim to an officer of Revenue and Customs for relief by way of a reduction of the amount to which the person is liable to secure that the amount does not exceed the potential benefit to the person.

(4) No account is to be taken in a claim under this paragraph of—

(a) any amount of costs that may be incurred in connection with the realisation of a potential benefit unless that amount has been paid before making the claim, or

(b) any losses associated with the taking of the disqualifying steps (as the underlying tax has already been reduced as a result of the application of step 2 in paragraph 3(1)).

(5) An officer of Revenue and Customs to whom a claim is made under this paragraph must determine the claim and make so much (if any) of the reduction claimed as the officer considers is just and reasonable.

(6) A reduction may be made by way of an assessment or the modification of an assessment, or otherwise.

(7) The officer must notify their determination of the claim to the person making it.

(8) A person who has made a claim under this paragraph that has not been determined by an officer of Revenue and Customs may apply to the tribunal for a direction requiring an officer of Revenue and Customs to make that determination within a specified period.

(9) Any such application is subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).

(10) The tribunal must give the direction applied for unless satisfied that there are reasonable grounds for not determining the claim within a specified period.