CTM61575 | Close companies: arrangements conferring benefit on participators: TAAR: tax avoidance arrangements
From HM Revenue & Customs · Company Taxation Manual
The initial step in deciding whether can apply is to consider whether or not the close company is a party to tax avoidance arrangements on or after 20 March 2013. It cannot apply unless there are tax avoidance arrangements.
For these purposes, arrangements are tax avoidance arrangements where the main purpose or one of the main purposes of the arrangements is
to avoid or reduce, or obtain a relief or increased relief from a S455 charge, or
to obtain a ‘tax advantage’ for the participator or associate
‘Arrangements’ has a broad meaning and is defined in .
There are examples of specific situations where the TAAR might apply at .
Broadly, in most cases there will be a tax advantage for purposes where the arrangements result in:
(a) a relief from income tax or increased relief from income tax,
(b) a repayment of income tax or increased repayment of income tax,
(c) the avoidance or reduction of a charge to income tax or an assessment to income tax,
(d) the avoidance of a possible assessment to income tax
There is no specific timing restriction, the tax advantage and the arrangements can occur in any order.
Before arguing that Section 464A applies in any particular case, please refer with the papers to CTIS (Technical).