Income Tax Act 2007 (c. 3)

Part 13 U.K. Tax avoidance

Chapter 1 U.K. Transactions in securities

[F1 Person liable to counteraction of income tax advantages U.K.

Textual Amendments

F1 Ss. 682-687 and cross-headings substituted (8.4.2010 with effect in accordance with Sch. 12 para. 15(1) of the amending Act) for s. 682-694 and cross-headings by Finance Act 2010 (c. 13), Sch. 12 para. 2

687 Income tax advantage U.K.

(1) For the purposes of this Chapter [F2 a person] obtains an income tax advantage if—

(a) the amount of any income tax which would be payable by the person in respect of the relevant consideration if it constituted a F3 ... distribution exceeds the amount of any capital gains tax payable in respect of it, or

(b) income tax would be payable by the person in respect of the relevant consideration if it constituted a F3 ... distribution and no capital gains tax is payable in respect of it.

(2) So much of the relevant consideration as exceeds the maximum amount that could in any circumstances have been paid to the person [F4 or an associate of the person] by way of a F3 ... distribution at the time when [F5 Condition A or B in section 685 is met] is to be left out of account for the purposes of subsection (1).

(3) The amount of the income tax advantage is the amount of the excess or (if no capital gains tax is payable) the amount of the income tax which would be payable.

(4) In this section[F6 —

(a) distribution” does not include a distribution which is a distribution for the purposes of the Corporation Tax Acts only because it falls within paragraph C or D in section 1000(1) of CTA 2010 (redeemable share capital or security issued as bonus in respect of shares in, or securities of, the company), and

(b)] “relevant consideration” has the same meaning as in section 685.]

Textual Amendments

F2 Words in s. 687(1) substituted (with effect in accordance with s. 33(8) of the amending Act) by Finance Act 2016 (c. 24), s. 33(6)(a) (with s. 33(9)(10))

F3 Word in s. 687 omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 63(10)(a)

F4 Words in s. 687(2) inserted (with effect in accordance with s. 33(8) of the amending Act) by Finance Act 2016 (c. 24), s. 33(6)(b)(i) (with s. 33(9)(10))

F5 Words in s. 687(2) substituted (with effect in accordance with s. 33(8) of the amending Act) by Finance Act 2016 (c. 24), s. 33(6)(b)(ii) (with s. 33(9)(10))

F6 Words in s. 687(4) inserted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by Finance Act 2016 (c. 24), Sch. 1 para. 63(10)(b)