The two big controversies in the ever thrilling world of tax right now are:-

a) HMRC’s new investigative powers (which are quite a bit wider than the old ones in the fine detail); and

b) Introducing a participation exemption for foreign dividends (broadly speaking, and the devil is in the details on this one, exempting foreign dividends from tax, along the lines of most other jurisdictions in Europe).

The off-the-record quotes from Tax Inspectors seems to be suspiciously pertinent to support HMRC’s views on both these matters…

That said, Vince Cable’s comments were the only sensible ones I’ve seen – he’s correctly identified SDLT avoidance as the most blatant example I’m aware of that’s going on today. (At some point, I must set down for the record the archaeology of stamp duty/SDLT avoidance schemes, from split legal/beneficial interests, via the use of offshore partnerships, through to JPUTs[1], and beyond.)

[1] A classic example of an own-goal by the Government. They introduce, in the 2005 (?) Finance Act, an exemption for transfer of properties into a Unit Trust. Just about every expensive commercial property in the UK was promptly transferred into a Jersey Property Unit Trust. For all intents and purposes, this is a transparent entity[2], and so you don’t lose any real rights of ownership – future sales of units in the trust are free of SDLT. Needless to say, seeding relief was abolished, without notice, in the 2006 Budget.

[2] OK, bar capital gains, but this makes nob-all difference in practice.

I was once told that an old-style king with a trade-route (river, mountain pass) through his territory had to impose tolls which were just that little bit cheaper than the cost of going the long way round.

Is this not the lesson that modern tax-gougers have forgotten ?

Alan Douglas