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E1.1450 Historical development of the transactions in securities regime

Before 6 April 1960 there was no general statutory provision that prevented a taxpayer from effecting transactions in securities aimed purely at tax avoidance. Various statutory provisions were aimed at specific tax avoidance devices, such as bond-washing, but the absence of an effective anti-avoidance enactment permitted the carrying on of a brisk trade in marketing arrangements. These were at first aimed at the avoidance of surtax on the accumulated income of trading companies and subsequently at the substitution of income chargeable to income tax by capital receipts not chargeable to tax at all, as there was no capital gains tax at all until 1965. Even after the introduction of capital gains tax, the rate of tax on capital gains has at various later times been much lower than the rate of tax on income. Indeed, capital gains tax on gains for individuals can now be as low as 10% and for companies, gains on disposals