ATCS08900 | Low-risk view on unallowable purpose rules in the loan relationships and derivative contracts regimes: low-risk view format and contents

If the decision is to issue a low-risk view, it is expected to be along the lines of the following:

Based on

• HMRC's review of the following information and documents with a list of the relevant evidence

• the discussions at meetings as recorded, with reference to the relevant documents

which are the only information and documents which have been reviewed and relied on in forming our view: I can confirm that HMRC would view [identify loan relationships and/ or derivative contracts, including parties, and amount of principal] as being at a low risk of being subject to a compliance intervention in relation to the unallowable purpose rules in the loan relationships regime (S441-442 CTA 2009) and/or in the derivative contracts regime (S690-691 CTA 2009), the unallowable purpose issue.

Subject to the following this low-risk view applies from [date of issue] to [end date] (unless amended or withdrawn earlier in accordance with this letter).

This low-risk view is administrative and non-binding. It does not preclude HMRC from opening an enquiry, issuing or amending assessments (including discovery assessments), making amendments (including, where relevant, a jeopardy amendment during an open enquiry), issuing closure notices, making determinations, or taking any other compliance or protective action as HMRC considers appropriate. This low-risk view is not a representation that HMRC will forgo future compliance action and does not bind HMRC in any enquiry, assessment, appeal or litigation.

Separately from this low-risk view, HMRC has also considered your application to the Advance Tax Certainty service dated [date]. HMRC’s decision in relation to that application is set out in the separate letter dated [date]. For the avoidance of doubt, this low-risk view is not part of the decision made in relation to your application to the Advance Tax Certainty service, is not given under the statutory Advance Tax Certainty clearance provisions, and does not modify, extend or qualify any clearance given in that letter. This low-risk view is governed solely by the terms, conditions and limitations set out in this letter and, as set out above, is administrative and non-binding.

HMRC may amend or withdraw this low-risk view at any time. This may occur, for example (but not limited to), where material facts change, further relevant information comes to light, HMRC’s policy approach or risk assessment changes, HMRC identifies that the view was given in error, the law changes, or a relevant court or tribunal decision affects HMRC’s understanding of the law.

This low-risk view is provided in relation to HMRC's risk assessment of the unallowable purpose issue described above. It should not be treated as HMRC agreeing the overall tax treatment of the arrangements, nor as addressing any other potential issues.

This view is given on the basis of full and accurate disclosure.

You must notify HMRC if any material fact changes or if any additional information emerges that may be relevant to this view as soon as is reasonably practicable [identify any further requirements for specific monitoring/ disclosure to HMRC].

I hope you find this helpful in setting out HMRC’s view in relation to HMRC’s risk assessment of the unallowable purpose issue described above, on the basis of, and subject to, the conditions and limitations set out above.