The government has legislated to prevent a tax avoidance scheme involving the use of fake property businesses.
The scheme, marketed to high net worth individuals, uses a series of artificial transactions to generate tax relief from a property business which owns agricultural land.
People who suffer financial losses due to agricultural expenses allowances are able to claim property business loss relief.
The businesses and land used in this scheme are real, but the transactions involved are only generated to create an artificial loss in order to gain tax relief, the Treasury said in a statement.
It was being used by wealthy taxpayers in order to reduce their end-of-year bill, the government said.
The legislation, effective from today, will form part of the Finance Bill 2012.
David Gauke, exchequer secretary to the Treasury, said: "At a time when our top economic priority is reducing the deficit, it is unacceptable for anyone to try to avoid paying a fair share.
"Today's action will not affect legitimate agricultural businesses, but by acting swiftly, the government has prevented this scheme being used by people who want to escape paying the tax they owe.
"We will not hesitate to close other avoidance schemes down as we become aware of them."
In February, the government legislated against two "aggressive" tax avoidance schemes used by Barclays Bank.
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