CG44142 | Targeted rules to prevent income to capital converter schemes by companies - conditions for the issue of a notice

From HM Revenue & Customs · Capital Gains Manual

HMRC will only issue a notice in a case under TCGA92/S184H(6) when it is considered that all of the following apply:

  • A gain arises to a participant in the arrangements,

  • The gain would, but for this legislation, have been reduced by allowable losses,

  • As a consequence of the arrangements that gave rise to the gain, a party to those arrangements obtains a deduction in computing profits chargeable to corporation tax, which, absent the arrangements, it would not have been entitled, and,

  • It was the main purpose, or one of the main purposes, of the arrangements to secure the reduction in those profits.