A technicality in some legislation or regulation that makes it possible to avoid certain consequences or circumvent a rule without breaking the law, such as in the use of a tax shelter. Bloomberg Financial Dictionary

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loophole loop‧hole [ˈluːphəʊl ǁ -hoʊl] noun [countable] LAW
a small mistake in a law that makes it possible to do something the law is supposed to prevent you from doing, or to avoid doing something that the law is supposed to make you do:

• You can be sure that any tax loopholes will be exploited.

• The administration moved to close the legal loopholes exempting government education programs from the requirements of the Bill.

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loophole UK US /ˈluːphəʊl/ noun [C] LAW
a failure to include something in an agreement or law, which allows someone to do something illegal or to avoid doing something: »

They plan to close a loophole that allows businesses to avoid paying off redundant workers.

a corporate/legal/tax loophole »

He has pledged to close a tax loophole that has allowed US firms to take business and jobs abroad.

a loophole in sth »

Determined landlords found it easy to exploit loopholes in the law.

Financial and business terms. 2012.

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