New measures came into effect on 1 January 2011 to strengthen and improve the Disclosure of Tax Avoidance Schemes (DOTAS) rules.

In summary: 

  • Measure 1: a change to the trigger point for disclosure of marketed schemes to ensure early disclosure of schemes.
  • Measure 2: an information power to allow HM Revenue & Customs to require intermediaries in the marketing of schemes to provide information leading to the identification of the promoter.
  • Measure 3: enhanced penalties for failure to comply with a disclosure obligation.
  • Measure 4; a requirement for promoters to provide periodic lists of clients who have implemented schemes.
  • Measure 5  revised hallmarks (the descriptions of schemes requiring disclosure).

The provisions are contained in  Schedule 17 of Finance Act 2010.

New regulations also:

  • Increase the maximum amount of the new initial daily penalty to £5,000 where a promoter fails to disclose a scheme after the making of an order under section 306A or 314A.
  • Prescribe the information and timing rules for the new client list and intermediary information power provisions mentioned above.
  • Prescribe the period after which the increased maximum initial daily penalties apply after the Tribunal has issued a disclosure order. It is ten days.

Finance Bill 2011
From 5 April 2011, transfers of property into a trust will be disclosable under the DOTAS regime. The usual hallmarks will not apply but "grandfathering provisions" will try to ensure that certain transfers will not require repeat notification. HMRC will be providing further guidance.  

Links:

Our overview of DOTAS

HMRC news 

Draft legislation Finance Bill 2011

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