Finance Act 2009

Part 6 Anti-avoidance

Schemes involving manipulation of rules in Part 2

47 (1) A period of account of the worldwide group that, apart from this paragraph, is not within paragraph 2(1) is treated as within that provision if conditions A to C are met.

(2) Condition A is that—

(a) at any time before the end of the period, a scheme is entered into, and

(b) if the scheme had not been entered into, the period would have been within paragraph 2(1).

(3) Condition B is that the main purpose, or one of the main purposes, of any party to the scheme on entering into the scheme is to secure that the period is not within paragraph 2(1).

(4) Condition C is that the scheme is not an excluded scheme.

Schemes involving manipulation of rules in Parts 3 and 4

48 (1) Where conditions A to C are met in relation to a period of account of the worldwide group (“the relevant period of account”), the tested expense amount, the tested income amount and the available amount for the period are to be calculated in accordance with paragraph 50.

(2) Condition A is that—

(a) at any time before the end of the relevant period of account, a scheme is entered into, and

(b) the main purpose, or one of the main purposes, of any party to the scheme on entering into it is to secure that the amount of the relevant net deduction (within the meaning given by paragraph 49) is lower than it would be if that amount were calculated in accordance with paragraph 50.

(3) Condition B is that a result of the scheme is that—

(a) the sum of the profits of UK group companies that arise in relevant accounting periods and that are chargeable to corporation tax is less than it would be if that sum were determined in accordance with paragraph 50, or

(b) the sum of the losses of UK group companies that arise in relevant accounting periods (other than any taken into account in calculating profits within paragraph (a)) and that are capable of being a carried-back amount or a carried-forward amount is higher than it would be if that sum were determined in accordance with paragraph 50.

(4) Condition C is that the scheme is not an excluded scheme.

(5) In a case where—

(a) a profit or loss arises in an accounting period of a UK group company, and

(b) a proportion of that period does not fall within the relevant period of account,

the profit or loss is to be reduced, for the purposes of condition B, by the same proportion.

Meaning of “relevant net deduction”

49 (1) In paragraph 48(2) the “relevant net deduction” means—

(a) the amount by which the total disallowed amount exceeds the tested income amount, or

(b) if the total disallowed amount does not exceed the tested income amount, nil.

(2) In this paragraph the “total disallowed amount” means—

(a) the amount by which the tested expense amount exceeds the available amount, or

(b) if the tested expense amount does not exceed the available amount, nil.

Calculation of amounts

50 (1) References in paragraph 48 to the calculation of any amount or sum in accordance with this paragraph are to the calculation of that amount or sum on the following assumptions.

(2) The assumptions are that—

(a) the scheme in question was not entered into, and

(b) instead, anything that it is more likely than not would have been done or not done, had this Schedule not had effect in relation to the relevant period of account, was done or not done.

Meaning of “carried-back amount” and “carried-forward amount”

51 (1) In paragraph 48 “carried-back amount” means—

(a) an amount carried back under section 393A(1)(b) of ICTA (trading losses),

(b) an amount carried back by virtue of a claim under section 459(1)(b) of CTA 2009 (non-trading deficits from loan relationships), or

(c) an amount carried back under section 389(2) of CTA 2009 (deficits of insurance companies).

(2) In paragraph 48 “carried-forward amount” means—

(a) an amount carried forward under section 76(12) or (13) of ICTA (certain expenses of insurance companies),

(b) an amount carried forward under section 392A(2) or (3) of ICTA (UK property business losses),

(c) an amount carried forward under section 392B(1)(b) of ICTA (overseas property business losses),

(d) an amount carried forward under section 393(1) of ICTA (trading losses),

(e) an amount carried forward under section 396(1) of ICTA (losses from miscellaneous transactions),

(f) an amount carried forward under section 436A(4) of ICTA (insurance companies: losses from gross roll-up business),

(g) an amount carried forward under section 8(1)(b) of TCGA 1992 (allowable losses),

(h) an amount carried forward under section 391(2) of CTA 2009 (deficits of insurance companies),

(i) an amount carried forward under section 457(3) of CTA 2009 (non-trading deficits from loan relationships),

(j) an amount carried forward under section 753(3) of CTA 2009 (non-trading loss on intangible fixed assets),

(k) an amount carried forward under section 925(3) of CTA 2009 (patent income: relief for expenses), or

(l) an amount carried forward under section 1223 of CTA 2009 (expenses of management and other amounts).

Schemes involving manipulation of rules in Part 5

52 (1) This paragraph applies to a financing income amount of a company received during a period of account of the worldwide group if—

(a) apart from this paragraph, the financing income amount would, by virtue of paragraph 40, not be brought into account for the purposes of corporation tax, and

(b) conditions A to C are met.

(2) Condition A is that, at any time before the financing income amount is received, a scheme is entered into that secures that any of the conditions in sub-paragraphs (2) to (4) of paragraph 40 (“the relevant paragraph 40 condition”) is met in relation to the amount.

(3) Condition B is that the purpose, or one of the main purposes, of any party to the scheme on entering into the scheme is to secure that the relevant paragraph 40 condition is met.

(4) Condition C is that the scheme is not an excluded scheme.

(5) Where this paragraph applies to a financing income amount, the relevant paragraph 40 condition is treated as not met in relation to the amount.

(6) Paragraph 46 (meaning of references to a “financing income amount” of a company) applies for the purposes of this paragraph.

Meaning of “scheme” and “excluded scheme”

53 (1) For the purposes of this Part “scheme” includes any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving a single transaction or two or more transactions.

(2) For the purposes of this Part a scheme is “excluded” if it is of a description specified in regulations made by the Commissioners.

(3) Regulations under sub-paragraph (2) may make different provision for different purposes.