SCHEDULES

SCHEDULE 16Penalties for enablers of defeated tax avoidance

PART 4Persons who “enabled” the arrangements

Financial enablers

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1

For the purposes of paragraph 7 a person is a “financial enabler” in relation to the arrangements if—

a

in the course of a business carried on by that person, that person provided a financial product (directly or indirectly) to a relevant party,

b

it is reasonable to assume that the purpose (or a purpose) of the relevant party in obtaining the financial product was to participate in the arrangements, and

c

when the financial product was provided, the person providing it knew or could reasonably be expected to know that the purpose (or a purpose) of obtaining it was to participate in abusive tax arrangements.

2

In this paragraph “a relevant party” means T or an enabling participant in the arrangements within the meaning given by paragraph 11.

3

Any reference in this paragraph to a person's providing a financial product to a relevant party includes (but is not limited to) the person's doing any of the following—

a

providing a loan to a relevant party;

b

issuing or transferring a share to a relevant party;

c

entering into arrangements with a relevant party such that—

i

the person becomes a party to a relevant contract within the meaning of section 577 of CTA 2009 (derivative contracts);

ii

there is a repo in respect of securities within the meaning of section 263A(A1) of TCGA 1992;

iii

the person or the relevant party has a creditor repo, creditor quasi-repo, debtor repo or debtor quasi-repo within the meaning of sections 543, 544, 548 and 549 of CTA 2009;

d

entering into a stock lending arrangement, within the meaning of section 263B(1) of TCGA 1992, with a relevant party;

e

entering into an alternative finance arrangement, within the meaning of Chapter 6 of Part 6 of CTA 2009 or Part 10A of ITA 2007, with a relevant party;

f

entering into a contract with a relevant party which, whether alone or in combination with one or more other contracts—

i

is in accordance with generally accepted accounting practice required to be treated as a loan, deposit or other financial asset or obligation, or

ii

would be required to be so treated by the person if the person were a company to which the Companies Act 2006 applies;

and references to obtaining a financial product are to be read accordingly.

4

The Treasury may by regulations amend sub-paragraph (3).