SCHEDULES
F1SCHEDULE 34APromoters of tax avoidance schemes: defeated arrangements
PART 2Meaning of “relevant defeat”
Case 3: proportion-based relevant defeat
9
1
Case 3 applies if—
a
at least 75% of the tested arrangements have been defeated, and
b
no final judicial ruling in relation to any of the related arrangements has upheld a corresponding tax advantage which has been asserted in connection with any of the related arrangements.
2
In this paragraph “the tested arrangements” means so many of the related arrangements (as defined in paragraph 5(3)) as meet the condition in sub-paragraph (3) or (4).
3
Particular arrangements meet this condition if a person has made a return, claim or election on the basis that a tax advantage results from those arrangements and—
a
there has been an enquiry or investigation by HMRC into the return, claim or election, or
b
HMRC assesses the person to tax on the basis that the tax advantage (or any part of it) does not arise, or
c
a GAAR counteraction notice has been given in relation to the tax advantage or part of it and the arrangements.
4
Particular arrangements meet this condition if HMRC takes other action on the basis that a tax advantage which might be expected to arise from those arrangements, or is asserted in connection with them, does not arise.
5
For the purposes of this paragraph a tax advantage has been “asserted” in connection with particular arrangements if a person has made a return, claim or election on the basis that the tax advantage arises from those arrangements.
6
In sub-paragraph (1)(b) “corresponding tax advantage” means a tax advantage corresponding to any tax advantage the counteraction of which is taken into account by HMRC for the purposes of sub-paragraph (1)(a).
7
For the purposes of this paragraph a court or tribunal “upholds” a tax advantage if—
a
the court or tribunal makes a ruling to the effect that no part of the tax advantage is to be counteracted, and
b
that judicial ruling is final.
8
In this paragraph references to “counteraction” include anything referred to as a counteraction in any of Conditions A to F in paragraphs 11 to 16.
9
In this paragraph “GAAR counteraction notice” means—
a
a notice such as is mentioned in sub-paragraph (2) of paragraph 12 of Schedule 43 to FA 2013 (notice of final decision to counteract),
b
a notice under paragraph 8(2) or 9(2) of Schedule 43A to that Act (pooling or binding of arrangements) stating that the tax advantage is to be counteracted under the general anti-abuse rule, or
c
a notice under paragraph 8(2) of Schedule 43B to that Act (generic referrals) stating that the tax advantage is to be counteracted under the general anti-abuse rule.
Sch. 34A inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 160(5)