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ITTOIA05/S396B and S404A provide no statutory clearance procedure.  Although there is a non-statutory clearance procedure (see the ONSCG manual), the applicant would not be uncertain about purpose, which is a subjective matter.  It follows that a clearance application would not be appropriate unless it is limited to the application of specific rules in the legislation where there is genuine uncertainty about their application to a specific proposed transaction.

Transactions in Securities

The transactions in securities legislation does provide a statutory clearance procedure at ITA07/S701.  However, a clearance given on a distribution in a winding under S701 does not extend to S396B or S404A.

The transactions in securities rules apply only where there is a tax advantage.  ITA07/S687 explains that there is a tax advantage if:

'the amount of any income tax that would be payable by the person in respect of the relevant consideration if it constituted a distribution exceeds the amount of any capital gains tax payable in respect of it'.

Where S396B or S404A apply to a distribution in a winding-up then Income Tax is payable on the distribution, and it follows that there can be no tax advantage for the purpose of the transactions in securities legislation.  That means that the transactions in securities rules cannot apply where S396B or S404A does, and a clearance under ITA07/S701 cannot extend to the application of those sections.   But clearance may still be relevant to the extent that S396B and S404A do not apply.