5.The three Targeted Anti-Avoidance Rules within TCGA 1992 have wide application to counter arrangements that seek to misuse capital losses to obtain a tax advantage. The abuses they are intended to counter are:
TAAR 1 - the contrived creation of capital losses where there has been either no economic loss or a disposal of any substance.
TAAR 2 – the sale of companies between groups to allow losses incurred by one group to be relieved against the gains of another, and
TAAR 3 – the use of capital losses to shelter income profits.
6.The section confirms that TAAR 3 applies generally to the contrived use of capital losses to reduce income profits.
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