On 7 February 2008, HMRC published revised draft legislation and examples relating to disguised interest as part of its ongoing consultation on a principles-based approach to financial products tax avoidance. The changes have been made to reflect comments received at the open day held on 11 January 2008. The main changes include the introduction of a purpose test, an explicit statement that the rules are not intended to create double taxation and provisions dealing with overlap between the principles-based approach and the existing loan relationships, derivative contracts and controlled foreign companies rules.

The consultation remains open until 28 February 2008 and a follow-up meeting is to be held on 21 February 2008.