Paragraph 7 F1

Schedule 43 (procedural requirements) has effect with the following modifications.

Schedule 43 is to be read as if paragraphs 1A and 3 were omitted.

References to a notice given under paragraph 3 of Schedule 43 are to be read as if they were to a notice given under paragraph 5 of this Schedule.

In paragraphs 4 and 6 to 12, references to the taxpayer are to be read as if they were to the responsible partner.

Schedule 43 is to be read as if, for paragraphs 4A and 4B (and the headings before those paragraphs), there were substituted—

“Corrective action taken by the responsible partner

4A

(1)

Where, in respect of a partnership—

(a)

a designated HMRC officer gives a notice under paragraph 5 of Schedule 43D in respect of a tax advantage arising to one or more partners,

(b)

the closed period mentioned in section 209(8) has not begun, and

(c)

the responsible partner—

(i)

amends a partnership return or claim to counteract the tax advantage, and

(ii)

notifies HMRC of that fact,

the matter is not to be referred to the GAAR Advisory Panel.

(2)

Where a tax enquiry is in progress, no enactment limiting the time during which amendments may be made to returns or claims operates to prevent the responsible partner taking the action mentioned in sub-paragraph (1)(c)(i) and (ii) before the enquiry is closed.

(3)

No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (4), against an amendment made by a closure notice in respect of a tax enquiry, to the extent that the amendment takes into account an amendment made by the responsible partner to a return or claim as mentioned in sub-paragraph (1)(c).

(4)

The provisions are—

(a)

section 31(1)(b) or (c) of TMA 1970,

(b)

paragraph 9 of Schedule 1A to TMA 1970.

Corrective action by relevant partners

4B

(1)

Where, in respect of a partnership—

(a)

a designated HMRC officer gives a notice under paragraph 5 of Schedule 43D in respect of a tax advantage arising to one or more partners,

(b)

the closed period mentioned in section 209(8) has not begun, and

(c)

a partner mentioned in paragraph (a) takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing the tax advantage,

the partner is not to be treated as a relevant partner for the purposes of Part 3 of Schedule 43D.

(2)

As soon as is practicable after the beginning of the closed period, the notice given under paragraph 5 of Schedule 43D must be amended by a designated HMRC officer so each partner to whom sub-paragraph (1) applies is no longer specified in it.

(3)

Where a notice is amended in accordance with sub-paragraph (2), the notice is treated as having been given in the amended form.

(4)

If a partner to whom sub-paragraph (1) applies fails to enter into the written agreement, HMRC may proceed as if that sub-paragraph had not applied in relation to the partner (and accordingly, as if the partner were a relevant partner).

Referral to GAAR Advisory Panel

4C

Paragraph 5 and 6 apply if, immediately before the beginning of the closed period mentioned in section 209(8)—

(a)

the responsible partner has not taken the action described in paragraph 4A(1)(c), and

(b)

there is at least one relevant partner.”