Accountancy Age reports:
HMRC has foiled another charity tax avoidance scheme, leading to a governmental overhaul of the rules governing relief for charitable donations.
The scheme is the latest arrangement the taxman has nipped in the bud after the well-documented case against Vantis, which has seen two of its directors hauled to the High Court.
As the Age notes though:
As part of the changes which are effective immediately, anyone giftingshares to charities will only be able to claim relief on the lower of the acquisition value of the shares, or the current market price.
It is particularly offensive that individuals seeking to avoid tax do so in a way that exploits charity tax reliefs
The government respone is appropriate:
Stephen Timms, financial secretary to the Treasury branded the arrangement an "artificial, aggressive and offensive tax avoidance scheme that seeks to abuse those tax reliefs available for donations to charity."
"This Government will not tolerate tax avoidance or tax evasion, and will act promptly to tackle both of these, so I am today announcing changes to be made to legislation, with immediate effect, to counter these schemes."
I added the emphasis.
This scheme was morally offensive and abusive. Thoxse who argue what is legal is acceptable should be ashamed of themselves.
It is time the Institute of Chartered Accountants in England and Wales and other institutes made it cleat tax avoidance is beyond the pale. Until they do accountants stand alongside bankers in the scale of social acceptability, which, unlike bankers, we have room to correct.
And the government too should take action: there is need for radical reform for charitable tax relief. I've outlined how here.