(1)No deduction is allowed under section 1219 for any particular expenses of management if any part of those expenses is incurred directly or indirectly in consequence of, or otherwise in connection with, any arrangements for securing a tax advantage.
(2)In subsection (1) “arrangements for securing a tax advantage” means arrangements the main purpose, or one of the main purposes, of which is to secure—
(a)the allowance of a deduction (or increased deduction) under section 1219, or
(b)any other tax advantage.
(3)Subsection (1) does not apply if, as a result of paragraph 7A of Schedule 23A to ICTA (manufactured payments under arrangements having an unallowable purpose), the company incurring the expenses is not entitled to a relevant tax relief in respect of, or referable to, the whole or any part of the expenses.
(4)The reference in subsection (1) to expenses of management includes amounts treated by any provision as deductible under section 1219.
(5)In this section—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
“relevant tax relief” has the same meaning as in paragraph 7A of Schedule 23A to ICTA, and
“tax advantage” has the meaning given by section 840ZA of ICTA.