Technical Tuesday | How will the new anti-avoidance rule affect the clearance process? скачать в хорошем качестве

Technical Tuesday | How will the new anti-avoidance rule affect the clearance process?

Following the Autumn Budget 2025, we have a new anti-avoidance test for share exchanges and reconstructions. This change is actually quite significant to the drafting of clearances from now on. For years, the rules relied on s137 TCGA, blocking relief only where a share exchange was part of a tax-avoidance scheme. But after HMRC lost key cases like Wilkinson and Delinian, the Finance Bill 2025 has now introduced a radically broader approach. What’s new? • The commercial purpose test is removed entirely. • Relief can be denied if any part of the arrangements has a main purpose of reducing or avoiding CGT or corporation tax. • “Arrangements” now captures any agreement, understanding or informal step. • HMRC can apply partial adjustments, targeting tax-motivated steps while allowing relief on commercial ones. • Protection for minority shareholders (≤5%) is gone, putting all shareholders within scope. What does this mean for advisers and businesses? • Break transactions down into clear, defensible commercial steps. • Expect longer and more forensic clearance processes. • Prepare for increased scrutiny of step-by-step rationale, alternatives considered and beneficiaries. • Some previously accepted planning (e.g., base cost uplifts in mergers/demergers) may now be open to challenge. This is a major post-Budget shift that will reshape how reorganisations are structured and reviewed going forward. What’s your take on the new anti-avoidance framework?