Finance Act 1981

22 (1) An adjustment shall be made under this paragraph where any arrangements have been effected by a person carrying on a trade, or by him and other persons acting together, such in particular as those mentioned in sub-paragraph (2) below, and it appears that the sole or main benefit which, but for this paragraph, might have been expected to accrue to that person was—

(a) the obtaining of relief or the reduction of the amount of a charge under this Schedule; or

(b) a reduction in the amount of relief to which effect cannot be given by virtue of paragraph 10 or 17(1) above.

(2) The arrangements referred to in sub-paragraph (1) above are—

(a) any acquisition or disposal of trading stock otherwise than in the normal course of the trade in question ; or

(b) any change in the normal pattern or method of carrying on the trade; or

(c) any change in the date to which the accounts of the trade are made up ; or

(d) any increase in the value of a person's trading stock or any acquisition by a person of trading stock, being an increase or acquisition which is associated with a decrease in the trading stock of another person connected with him (within the meaning of section 533(5) or (6) of the Taxes Act).

(3) In a case within sub-paragraph (1)(a) above the adjustment is to substitute for the purposes of this Schedule, for the value of the trading stock of the person concerned at the end of any period of account which appears to have been affected by the arrangements, the value which it appears that the trading stock would then have had if those arrangements had not been made.

(4) In a case within sub-paragraph (1)(b) above the adjustment is to determine the amount of relief to which effect cannot be given by virtue of paragraph 10 or 17(1) above as if the arrangements had not been made.