Specific anti-avoidance measures were introduced by the Chancellor on 21 March 2012 for inclusion in the 2012 Finance Act.


With the aim of blocking schemes disclosed under the DOTAS regime, they are effective immediately.  

Settlements legislation - corporate settlors

Income arising under a settlement is treated as that of the settlor only where the settlor is an individual. The proposed changes would close avoidance schemes that seek to exploit the settlements legislation by using corporate settlors of ‘interest in possession’ settlor-interested trusts to try to avoid income tax at higher or additional rates which would otherwise be due on dividends paid by a subsidiary of the corporate settlor. The amendments would ensure that the relevant provisions do not apply to settlors who are not individuals and hence that the income would not be treated as that of the settlor in those situations. 

IHT: settled property 

Measures that amend the inheritance tax (IHT) settled property provisions relating to excluded property. Where an individual who is domiciled in the UK, acquires an interest in settled excluded property which, as a result of arrangements concerned with that acquisition, gives rise to a reduction in the value of that individual’s estate, the property will cease to be excluded property and a charge to IHT will arise. The charge will largely replicate the tax treatment that a UK domiciled individual would incur if the assets within the offshore trust, which are ‘excluded property’ and which would otherwise be ignored for IHT purposes, had instead been transferred to a UK trust.

Capital allowances: long funded leases

Measures to amend the rules for calculating the disposal value for the lessee at the end of a long funding lease operate so that the relief available by way of capital allowances does not exceed the net expenditure of the lessee not otherwise relieved.

Stamp Duty Land Tax – sub-sales

A measure to prevent a SDLT avoidance scheme, involving the sub-sales rules and an option to purchase land. The sub-sales rules will be amended so that it is clear that the grant or assignment of an option cannot satisfy the requirements of the sub-sales rules. 

Sale of lessor companies 

Legislation will be introduced in Finance Bill 2012 to create a new "trigger" event in the sale of lessor company legislation, which will bring the deferred tax profits of a lessor company into charge immediately before a lessor company comes within the charge to tonnage tax.

Further changes will prevent the losses of an accounting period following a change of ownership from being carried back against profits specifically brought into charge as a consequence of the sale of lessor company legislation. 

Waste disposal – site restoration payments to connected persons

The changes will affect section 145 CTA 2009 and section 168 ITTOIA 2005: a new rule where a person makes a payment, directly or indirectly, to a connected person that will ensure that a deduction is given for the period of account in which the work to which the payment relates is completed. A deduction will be denied for a payment where it arises from arrangements to which a person is party and the main purpose, or one of the main purposes, of the arrangements is obtaining a deduction for a site restoration payment.