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Part 15U.K.Transactions in securities

Procedure for counteraction of corporation tax advantagesU.K.

743Preliminary notification that section 733 may applyU.K.

(1)An officer of Revenue and Customs must notify a company if the officer has reason to believe that—

(a)section 733 (company liable to counteraction of corporation tax advantage) may apply to the company in respect of a transaction or transactions, and

(b)a counteraction notice ought to be served on the company under section 746 about the transaction or transactions.

(2)The notification must specify the transaction or transactions.

(3)See section 746 for the serving of counteraction notices, and sections 744 and 745 for cases where the company on which the notice under this section is served disagrees that section 733 applies.

744Opposed notifications: statutory declarationsU.K.

(1)If a company on which a notification is served under section 743 is of the opinion that section 733 (company liable to counteraction of corporation tax advantage) does not apply to the company in respect of the transaction or transactions specified in the notification, the company may—

(a)make a statutory declaration to that effect, stating the facts and circumstances on which the opinion is based, and

(b)send it to the officer of Revenue and Customs.

(2)Such a declaration must be sent within 30 days of the issue of the notification.

(3)If the company sends that declaration to the officer and the officer sees no reason to take further action—

(a)section 733 does not so apply, and

(b)accordingly no counteraction notice may be served on the company under section 746 about the transaction or transactions.

745Opposed notifications: determinations by tribunalU.K.

(1)This section applies if the officer of Revenue and Customs receiving a statutory declaration under section 744(1) sees reason to take further action about the transaction or transactions in question.

(2)The officer must send the tribunal a certificate to that effect, together with the statutory declaration.

(3)The officer may also send the tribunal a counter-statement with the certificate.

(4)The tribunal must—

(a)consider the declaration and certificate and any counter-statement, and

(b)determine whether there is a prima facie case for the officer to take further action on the basis that section 733 (company liable to counteraction of corporation tax advantage) applies to the company by which the declaration was made in respect of the transaction or transactions in question.

(5)If the tribunal determines that there is no such case—

(a)section 733 does not so apply, and

(b)accordingly no counteraction notice may be served on the company under section 746 about the transaction or transactions.

(6)But such a determination does not affect the application of sections 733 and 746 in respect of transactions including not only the ones to which the determination relates but also others.

746Counteraction noticesU.K.

(1)If—

(a)a company on which a notification is served under section 743 does not send a statutory declaration to an officer of Revenue and Customs under section 744 within 30 days of the issue of the notification, or

(b)the tribunal to which such a declaration is sent under section 745 determines that there is a prima facie case for serving a notice on a company under this section,

the corporation tax advantage in question is to be counteracted by adjustments.

(2)The adjustments required to be made to counteract the corporation tax advantage and the basis on which they are to be made are to be specified in a notice served on the company by an officer of Revenue and Customs.

(3)In this Part such a notice is referred to as a “counteraction notice”.

(4)Any of the following adjustments may be specified—

(a)an assessment,

(b)the nullifying of a right to repayment,

(c)the requiring of the return of a repayment already made, or

(d)the calculation or recalculation of profits or gains or liability to corporation tax.

(5)Nothing in this section authorises the making of an assessment later than 6 years after the accounting period to which the corporation tax advantage relates.

(6)This section is subject to—

(7)But no other provision in the Corporation Tax Acts is to be read as limiting the powers conferred by this section.

747Timing of assessments in section 738 casesU.K.

(1)This section applies if section 733 (company liable to counteraction of corporation tax advantage) applies to a company because it is in a position to obtain or has obtained a corporation tax advantage by falling within the circumstances mentioned in section 738 (receipt of relevant company assets (circumstance E)) when share capital is repaid.

(2)An assessment to corporation tax made in accordance with a counteraction notice must be an assessment for the accounting period in which the repayment occurs.

(3)The references in this section to the repayment of share capital include references to any distribution made in respect of any shares in a winding up or dissolution of the company.

(4)In subsection (3) “shares” includes stock and any other interest of a member in a company.