[F13A(1)This paragraph applies where a document of a kind listed in the Table in paragraph 1 is given to HMRC by a person (“P”) and the document contains an inaccuracy which—U.K.
(a)falls within paragraph 1(2), and
(b)arises because the document is submitted on the basis that particular avoidance arrangements (within the meaning of paragraph 3B) had an effect which in fact they did not have.
(2)It is to be presumed that the inaccuracy was careless, within the meaning of paragraph 3, unless—
(a)the inaccuracy was deliberate on P's part, or
(b)P satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid inaccuracy.
(3)In considering whether P took reasonable care to avoid inaccuracy, HMRC and (on an appeal notified to the tribunal) the tribunal must take no account of any evidence of any reliance by P on advice where the advice is disqualified.
(4)Advice is “disqualified” if any of the following applies—
(a)the advice was given to P by an interested person;
(b)the advice was given to P as a result of arrangements made between an interested person and the person who gave the advice;
(c)the person who gave the advice did not have appropriate expertise for giving the advice;
(d)the advice took no account of P's individual circumstances;
(e)the advice was addressed to, or given to, a person other than P;
but this is subject to sub-paragraphs (5) and (7).
(5)Where (but for this sub-paragraph) advice would be disqualified under any of paragraphs (a) to (c) of sub-paragraph (4), the advice is not disqualified under that paragraph if at the relevant time P—
(a)has taken reasonable steps to find out whether the advice falls within that paragraph, and
(b)reasonably believes that it does not.
(6)In sub-paragraph (4) “an interested person” means—
(a)a person, other than P, who participated in the avoidance arrangements or any transaction forming part of them, or
(b)a person who for any consideration (whether or not in money) facilitated P's entering into the avoidance arrangements.
(7)Where (but for this sub-paragraph) advice would be disqualified under paragraph (a) of sub-paragraph (4) because it was given by a person within sub-paragraph (6)(b), the advice is not disqualified under that paragraph if—
(a)the person giving the advice had appropriate expertise for giving it,
(b)the advice took account of P's individual circumstances, and
(c)at the time when the question whether the advice is disqualified arises—
(i)Condition E in paragraph 3B(5) is met in relation to the avoidance arrangements, but
(ii)none of Conditions A to D in paragraph 3B(5) is or has at any time been met in relation to them.
(8)If the document mentioned in sub-paragraph (1) is given to HMRC by P as a personal representative of a deceased person (“D”)—
(a)sub-paragraph (4) is to be read as if—
(i)the references in paragraphs (a) and (b) to P were to P or D;
(ii)the reference in paragraph (d) to P were to D, and
(iii)the reference in paragraph (e) to a person other than P were to a person who is neither P nor D,
(b)sub-paragraph (6) is to be read as if—
(i)the reference in paragraph (a) to P were a reference to the person to whom the advice was given, and
(ii)the reference in paragraph (b) to P were to D (or, where P also participated in the avoidance arrangements, P or D), and
(c)sub-paragraph (7) is to be read as if the reference in paragraph (b) to P were to D.
(9)In this paragraph—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“the relevant time” means the time when the document mentioned in sub-paragraph (1) is given to HMRC;
“the tribunal” has the same meaning as in paragraph 17 (see paragraph 17(5A)).]
Textual Amendments
F1Sch. 24 paras. 3A, 3B and cross-heading inserted (with effect in accordance with s. 64(5)(6) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 64(2)