416E Artificially inflated claims for first-year allowances

1

To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it shall be disregarded in determining for a chargeable period the amount of any first-year allowance to which a person is entitled.

2

For the purposes of this section, arrangements are entered into wholly or mainly for a “disqualifying purpose” if their main object, or one of their main objects, is to enable a person to obtain—

a

a first-year allowance to which he would not otherwise be entitled, or

b

a first-year allowance of a greater amount than that to which he would otherwise be entitled.

3

In this section “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.