Income Tax Act 2007 section 702

Effect of clearance notification under section 701

Section 702 sets out the legal consequences of receiving a clearance notification from HMRC under the transactions in securities provisions, and the circumstances in which that clearance can be relied upon or may be rendered void.

• Once HMRC issue a clearance notification confirming that no counteraction notice should be served in respect of described transactions, they are bound by that clearance for those specific transactions.
• The clearance only protects the specific transactions described in the application; HMRC can still serve a counteraction notice covering a wider set of transactions that includes additional ones beyond those cleared.
• The clearance notification is void if the applicant did not fully and accurately disclose all material facts and considerations in the original application or any further information provided.
• This section applies solely for income tax purposes; the equivalent corporation tax provision is section 707 of ICTA, and HMRC will treat a clearance that mistakenly refers to the wrong provision as if it referred to the correct one.