IEIM645000 - Hallmarks: Category D

On 28 March 2023 this legislation was repealed and replaced by the Mandatory Disclosure Rules legislation. Please refer to the guidance at IEIM700000 – Mandatory Disclosure Rules Legislation. The disclosable arrangements legislation (DAC6) will be withdrawn on 31 March 2024.

Hallmarks under category D share substantial common ground with the Mandatory Disclosure Rules (MDR) developed by the OECD. Whilst DAC 6 and the MDR are separate instruments and there are some different rules, for example around the period for which reports are required prior to the rules entering into force, the preamble to DAC 6 makes clear that the MDR, and the guidance and commentary which accompany those rules, are a source of illustration and interpretation for hallmarks under Category D of DAC 6. Accordingly, where Hallmark D and the MDR cover similar ground, HMRC will interpret Hallmark D in line with the MDR.

Hallmarks under category D are not subject to the main benefit test, and so are still reportable if the arrangement in question is not expected to generate a tax advantage.