Part II General Provisions relating to computation of gains and acquisitions and disposals of assets
Chapter I Introductory
16AF1Restrictions on allowable losses
1
For the purposes of this Act, “allowable loss” does not include a loss accruing to a person if—
a
it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
b
the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.
2
For the purposes of subsection (1)—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
“tax advantage” means—
- a
relief or increased relief from tax,
- b
repayment or increased repayment of tax,
- c
the avoidance or reduction of a charge to tax or an assessment to tax, or
- d
the avoidance of a possible assessment to tax,
and for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax.
- a
3
For the purposes of subsection (1) it does not matter—
a
whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
b
whether the tax advantage is secured for the person to whom the loss accrues or for any other person.