78 Relationship between rules prohibiting and allowing deductions
Finance Act 2013 (2013 c 29) | Legislation

78  Relationship between rules prohibiting and allowing deductions

(1)     In section 31 of ITTOIA 2005 (trade profits: relationship between rules prohibiting and allowing deductions)—

(a)     after subsection (1) insert—

“(1A)     But, if the relevant permissive rule would allow a deduction in calculating the profits of a trade in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—

(a)     does not have priority under subsection (1)(a), and

(b)     is subject to any relevant prohibitive rule in this Part (and to the provisions mentioned in subsection (1)(b)).”, and”

(b)     after subsection (3) insert—

“(4)     In this section “relevant tax avoidance arrangements” means arrangements—

(a)     to which the person carrying on the trade is a party, and

(b)     the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage (within the meaning of section 1139 of CTA 2010).

“Arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).”

(2)

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