442Meaning of “unallowable purpose”U.K.
(1)For the purposes of section 441 a loan relationship of a company has an unallowable purpose in an accounting period if, at times during that period, the purposes for which the company—
(a)is a party to the relationship, or
(b)enters into transactions which are related transactions by reference to it,
include a purpose (“the unallowable purpose”) which is not amongst the business or other commercial purposes of the company.
(2)If a company is not within the charge to corporation tax in respect of a part of its activities, for the purposes of this section the business and other commercial purposes of the company do not include the purposes of that part.
(3)Subsection (4) applies if a tax avoidance purpose is one of the purposes for which a company—
(a)is a party to a loan relationship at any time, or
(b)enters into a transaction which is a related transaction by reference to a loan relationship of the company.
(4)For the purposes of subsection (1) the tax avoidance purpose is only regarded as a business or other commercial purpose of the company if it is not—
(a)the main purpose for which the company is a party to the loan relationship or, as the case may be, enters into the related transaction, or
(b)one of the main purposes for which it is or does so.
(5)The references in subsections (3) and (4) to a tax avoidance purpose are references to any purpose which consists of securing a tax advantage for the company or any other person.