274Relationship between rules prohibiting and allowing deductionsU.K.
(1)Any relevant permissive rule in this Part—
(a)has priority over any relevant prohibitive rule in this Part, but
(b)is subject to [F1section 36 (unpaid remuneration), section 38 (employee benefit contributions), section 48 (car F2... hire) and section] 55 (crime-related payments), as applied by section 272[F3, and to section 272A (finance costs)].
[F4(1A)But, if the relevant permissive rule would allow a deduction in calculating the profits of a property business in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—
(a)does not have priority under subsection (1)(a), and
(b)is subject to any relevant prohibitive rule in this Part (and to the provisions mentioned in subsection (1)(b)).]
(2)In this section “any relevant permissive rule in this Part” means any provision of this Part (apart from sections 291 to 294) which allows a deduction in calculating the profits of a property business.
(3)In this section “any relevant prohibitive rule in this Part”, in relation to any deduction, means any provision of this Part (apart from sections [F536, 38,] 48 and 55, as applied by section 272[F6, and apart also from section 272A]) which might otherwise be read as—
(a)prohibiting the deduction, or
(b)restricting the amount of the deduction.
[F7(3A)In this section “relevant tax avoidance arrangements” means arrangements—
(a)to which the person carrying on the property business is a party, and
(b)the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage (within the meaning of section 1139 of CTA 2010).
“Arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).]
(4)In this section any reference to any provision of this Part includes any provision applied by section 272.
Textual Amendments
F1Words in s. 274(1)(b) substituted (with effect as stated in s. 67(7) of the amending Act) by Finance Act 2007 (c. 11), s. 67(5)
F2Words in s. 274(1)(b) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 42
F3Words in s. 274(1)(b) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 24(3)
F4S. 274(1A) inserted (with effect in accordance with s. 78(5)-(7) of the amending Act) by Finance Act 2013 (c. 29), s. 78(2)(a)
F5Words in s. 274(3) inserted (with effect as stated in s. 67(7) of the amending Act) by Finance Act 2007 (c. 11), s. 67(6)
F6Words in s. 274(3) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 24(4)
F7S. 274(3A) inserted (with effect in accordance with s. 78(5)-(7) of the amending Act) by Finance Act 2013 (c. 29), s. 78(2)(b)