Finance Act 2012

Anti-avoidance U.K.

17 (1) This paragraph applies if— U.K.

(a) on or after 21 March 2012 an insurance company (“C”) enters into any arrangements or does any other thing directly or indirectly for the purposes of, or in connection with, the operation of the transitional rules, and

(b) the main purpose, or one of the main purposes, of C in entering into the arrangements or doing the other thing is an unallowable purpose.

(2) A purpose is an “unallowable purpose” if—

(a) it consists of securing a tax advantage for C or any other company which is connected to the operation of the transitional rules, or

(b) it is not amongst C's business or other commercial purposes.

(3) If a tax advantage connected to the operation of the transitional rules arises to C, an officer of Revenue and Customs may make such adjustments as are required to negate the tax advantage so far as referable to the unallowable purpose on a just and reasonable apportionment.

(4) If a tax advantage connected to the operation of the transitional rules arises to a company other than C, an officer of Revenue and Customs may make such adjustments as are required to negate the tax advantage.

(5) The power to make adjustments under this paragraph includes power to make adjustments by any of the following means—

(a) an amendment of the company's tax return under paragraph 34(2) or (2A) of Schedule 18 to FA 1998 (amendment after enquiry),

(b) an assessment,

(c) the nullifying of a right to repayment,

(d) the requiring of the return of a repayment already made, and

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

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

(7) For the purposes of this paragraph—

(a) “arrangement” includes any agreement, scheme, transaction or understanding (whether or not legally enforceable),

(b) the reference to the operation of the transitional rules is a reference to the operation of any provision made by or under this Part of this Schedule,

(c) one example (among others) of entering into arrangements or otherwise doing something for the purposes of, or in connection with, the operation of those rules is entering into the arrangements or otherwise doing the thing to secure that an item is, or is not, taken into account in calculating the total transitional difference, and

(d) section 1139 of CTA 2010 (meaning of “tax advantage”) applies, but reading references to tax as references to corporation tax.

(8) If C is not within the charge to corporation tax in respect of a part of its activities, C's business or other commercial purposes for the purposes of this paragraph do not include the purposes of that part of its activities.

(9) This paragraph does not apply in any case if section 132 applies in that case.

18 (1) Paragraph 17 does not apply if, on an application by C, HMRC Commissioners give a notice under this paragraph stating that they are satisfied that the doing of the relevant things is or will be such that no action ought to be taken by an officer of Revenue and Customs under that paragraph. U.K.

(2) The reference here to the doing of the relevant things is a reference to the entering into of any arrangements, or the doing of any other thing, directly or indirectly for the purposes of, or in connection with, the operation of the transitional rules (within the meaning of paragraph 17).

19 (1) An application under paragraph 18 must— U.K.

(a) be in writing, and

(b) contain particulars of the arrangements or the thing done or proposed to be done.

(2) HMRC Commissioners may by notice require C to provide further particulars in order to enable them to determine the application.

(3) A requirement may be imposed under sub-paragraph (2) within 30 days of the receipt of the application or of any further particulars required under that sub-paragraph.

(4) If a notice under that sub-paragraph is not complied with within 30 days or such longer period as HMRC Commissioners may allow, they need not proceed further on the application.

(5) HMRC Commissioners must give notice to C of their decision on an application under paragraph 18—

(a) within 30 days of receiving the application, or

(b) if they give a notice under sub-paragraph (2), within 30 days of that notice being complied with or within such longer period as may be agreed with C.

(6) If any particulars provided under this paragraph do not fully and accurately disclose all facts and considerations material for the decision of HMRC Commissioners, any resulting notice under paragraph 18 is void.