Income Tax Act 2007 section 695

Notice of enquiry

Section 695 sets out the conditions under which an HMRC officer may open an enquiry into a transaction or transactions where an income tax advantage may need to be counteracted under the transactions in securities rules.

• An HMRC officer may enquire into a transaction or transactions if they have reason to believe that section 684 (counteraction of income tax advantage) may apply to a taxpayer
• The officer must notify the taxpayer of their intention to carry out the enquiry before proceeding
• The notification must be given within six years of the end of the tax year to which the income tax advantage relates
• This section is the first in a procedural sequence (sections 695 to 700) that governs how income tax advantages from transactions in securities are counteracted