Finance Act 1998

Section 703 of the Taxes Act 1988

32 (1) Section 703 of the Taxes Act 1988 (cancellation of tax advantage) shall be amended as follows.

(2) After subsection (3) there shall be inserted—

“(3A) The amount of income tax which may be specified in an assessment which is made under subsection (3) above to counteract a tax advantage—

(a) obtained by a person in circumstances falling within paragraph D or paragraph E of section 704, and

(b) consisting of the avoidance of a charge to income tax,

shall not exceed the amount of income tax for which that person would be liable in respect of the receipt, on the date on which the consideration mentioned in paragraph D or paragraph E of section 704 is received, of a qualifying distribution of an amount equal to the amount or value of that consideration.”

(3) Subsections (4) to (6) (which make provision in relation to treating of amounts of ACT as paid) shall cease to have effect.

(4) Sub-paragraph (2) above has effect in relation to assessments under section 703(3) of the Taxes Act 1988 made on or after 6th April 1999.

(5) Sub-paragraph (3) above has effect for the year 1999-00 and subsequent years of assessment.