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TCGA 1992, s 138 clearances

In order for shareholders in a paper for paper exchange to have some certainty as to their tax position, there is a statutory clearance procedure available under TCGA 1992, s 138. This provides that the taxpayer can request clearance that TCGA 1992, s 137 does not apply, ie that the transaction is for bona fide commercial reasons and the main purpose of which is not for tax avoidance. TCGA 1992, s 138 does not provide for a clearance procedure in respect of the other requirements for paper for paper treatment, eg ownership requirements. It is not a requirement that clearance is sought, however, the procedure exists so that commercial decisions are not hindered by uncertainty about the possible application of the anti-avoidance provisions.

It is worth noting that as the section 137 tax avoidance test does