LONDON (Bloomberg) - The UK Treasury unveiled legislation to close a loophole that allows wealthy individuals to reduce their personal tax bills by deducting losses incurred by companies that employ them.

The Revenue and Customs office of the Treasury said it has will introduce the measures to counter "artificial and aggressive avoidance" practices. The rule change targets people earning several hundreds of thousands pounds and will claw back about £200 million ($288 million) a year.

The change is "exclusively concerned with personal taxes, not business tax", the office said in a statement yesterday. "It affects only extreme abuse of the tax system."

Currently, wealthy individuals can hire advisers to artificially manufacture non-existent losses in companies which claim to employ them. Those losses are then offset against income taxes.

The new rules will become law in the 2009 Finance Bill and will apply from January 13, when the government pledged steps to counter another variant of the same avoidance scheme.