BKM307200 | Bank loss restriction: targeted anti-avoidance rules: scope of arrangements

Whether the conditions of the anti-avoidance rule are met is judged by reference to the tax arrangements (BKM307100) and identifying the scope of what constitutes the extent of the tax arrangements will be a key consideration. These considerations are also relevant to arrangements in the context of the anti-forestalling rule (BKM307800).

It will be necessary to consider:

• Whether or not a profit arises as a consequence of the arrangements or for another reason

• Whether the arrangements include transactions or steps inserted purely for the purposes of accessing relevant carried-forward losses

• Whether or not to include non-tax value arising from wider arrangements.

Too narrow or too broad a scope could lead to an incorrect amount of value being attributed to either of the tax or non-tax values (see BKM307300).

The scope of what is included in the tax arrangements must be judged on a case-by-case basis, and may involve work toward agreement between HM Revenue & Customs and the customer.