Part 5Loan Relationships

Chapter 4Continuity of treatment on transfers within groups or on reorganisations

Disapplication of Chapter where transferor party to avoidance

347Disapplication of Chapter where transferor party to avoidance

(1)This Chapter does not apply in the cases mentioned in—

(a)section 336 (transfers of loans on group transactions), and

(b)section 337 (transfers of loans on insurance business transfers),

if conditions A and B are met.

(2)Condition A is that the transferor is a party to arrangements in accordance with which there is likely to be a transfer of rights or liabilities under the loan relationship by the transferee to another person in circumstances in which section 336 or 337 would not apply.

(3)Condition B is that the purpose or one of the main purposes of the arrangements is to secure a tax advantage for the transferor or a person connected with it.

(4)This Chapter does not apply in relation to a disposal in the cases mentioned in subsection (1) if section 455 (disposals for consideration not fully recognised by accounting practice) applies in relation to the disposal.

(5)In this section—