Anti avoidane provisions

[salman78]

Can someone give me any specific example of where the aniti avoidance provisions of the new ITO have been applied.

[Goodman]

Hi salman

It will take some time for the tax authorities to apply anti avoidance provisions and as far as I know, there is no reported case yet gone to appeals process. But looking at sitution in the country, let me know how do feel about the following

1. A firm of tax consultants advise a client to transfer shares in his private limited company to a trust. Where the beneficiary and trustee is the original shareholder. To add some spice, the firm writes a letter and mentions that it will help save tax. The facts go to the appeals and then to appeal court, Revenue has every chance of enforcing anit avoidance legislation.

[Goodman]

take a simpler situation

A firm writes a letter to the same client, saying tranfer 50% holding to your wife, it will reduce overall tax liablity by making use of her allowances and any potential capital gains is distrubuted between husband and wife as well. I think you need a very good team of experts to help this situation escape anit avoidance legilsation