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ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice

Under the PCRT standards, which statement best describes how a member should act when advising a client on tax planning?

A member should act in the client's best interests within the law, but must not promote or assist planning that is artificial, contrived or contrary to the clear intention of Parliament. Lawful tax saving is acceptable, while aggressive schemes that defeat the purpose of the legislation are not.

  1. AAct in the client's interests by using any arrangement that reduces tax, provided it is not formally prohibited
  2. BAct in the client's best interests within the law, and not assist in tax planning that is contrary to the spirit of the legislation or is artificial or contrivedCorrect
  3. CRefuse to give any tax planning advice that results in a tax saving for the client
  4. DPut the interests of HMRC first and disclose all planning ideas to HMRC in advance

Explanation

PCRT requires members to act in the client's best interests while complying with the law and professional standards. Members must not create, encourage or promote tax planning arrangements, or structures, that set out to achieve results contrary to the clear intention of Parliament or that are artificial or contrived. Option A ignores the limit on aggressive planning.

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