Part 3Income tax, corporation tax and capital gains tax
Anti-avoidance
27Extension of restrictions on allowable capital losses
1
TCGA 1992 is amended as follows.
2
In section 8 (company's total profits to include chargeable gains)—
a
in subsection (2), for the words from “does not include—” to the end substitute “
does not include a loss accruing to a company in such circumstances that if a gain accrued the company would be exempt from corporation tax in respect of it.
”
, and
b
omit subsections (2A) to (2C).
3
After section 16 insert—
16ARestrictions 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.
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.
4
In section 288(1)
(interpretation), in the definition of “allowable loss”, after “16” insert “
, 16A
”
.
F15
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6
The amendments made by this section have effect in relation to losses accruing on disposals made on or after 6th December 2006.