Corporation Tax Act 2010

[F1 Anti-avoidance U.K.

Textual Amendments

F1 Pt. 7A inserted (with effect in accordance with Sch. 2 para. 7-9 of the amending Act) by Finance Act 2015 (c. 11), Sch. 2 para. 1

269CK Profits arising from tax arrangements to be disregarded U.K.

(1) This section applies if conditions A to C are met.

(2) Condition A is that—

(a) the amount given by step 1 in section 269CD(1) as the total profits of a banking company for an accounting period includes profits which arise to the banking company as a result of any arrangements (“the tax arrangements”), and

(b) in the absence of those profits (“the additional profits”) any deduction which the banking company would be entitled to make for the accounting period in respect of any relevant carried-forward losses would be reduced.

(3) Condition B is that the main purpose, or one of the main purposes, of the tax arrangements is to secure a relevant corporation tax advantage—

(a) for the banking company, or

(b) if there are any companies connected with that company, for the banking company and those connected companies (taken together).

(4) In this section “relevant corporation tax advantage” means a corporation tax advantage involving—

(a) the additional profits, and

(b) the deduction of any relevant carried-forward losses from those profits.

(5) Condition C is that, at the time when the tax arrangements were entered into, it would have been reasonable to assume that the tax value of the tax arrangements would be greater than the non-tax value of the tax arrangements.

(6) The “tax value” of the tax arrangements is the total value of—

(a) the relevant corporation tax advantage, and

(b) any other economic benefits derived by—

(i) the banking company, or

(ii) if there are any companies connected with that company, the banking company and those connected companies (taken together),

as a result of securing the relevant corporation tax advantage.

(7) The “non-tax value” of the tax arrangements is the total value of any economic benefits, other than those falling within subsection (6)(a) or (b), derived by—

(a) the banking company, or

(b) if there are any companies connected with that company, the banking company and those connected companies (taken together),

as a result of the tax arrangements.

(8) If this section applies, the additional profits are not to be taken into account in calculating the banking company's relevant profits for the accounting period (see section 269CD).

(9) In this section—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

• “corporation tax advantage” means—

  (a)

  a relief from corporation tax or increased relief from corporation tax,

  (b)

  a repayment of corporation tax or increased repayment of corporation tax,

  (c)

  the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax,

  (d)

  the avoidance of a possible assessment to corporation tax, or

  (e)

  the deferral of a payment of corporation tax or advancement of a repayment of corporation tax.]