Dealing with applications: application inconsistent with the policy intention of the legislation used: background
If a clearance application is received in which the interpretation put forward appears inconsistent with the policy intention underpinning the legislation advice should be sought from the Product and Process owner, see ONSCG5920.
Such situations are difficult to predict, but might include cases where an outcome is achieved that was not intended for taxpayers in the applicant’s situation, for instance where legislation aimed at an investment business has an unexpected consequence for a trading business.
It would be potentially misleading if we gave a clearance in these circumstances knowing that we might have to revisit legislation, the effect of which may subsequently alter the tax consequence for the business. The aim of the service is to give certainty, so although the application may be correct in law, it is felt to be preferable to draw attention to the inherent risks in such cases.
Such applications are expected to be few in number and will be dealt with on a case by case basis, for details of the action to be taken if such cases are identified