OT21615 | Corporation tax ring fence: hire of relevant assets - anti avoidance provision

The anti-avoidance rule provided by CTA2010\S285A(8) is widely drawn and includes arrangements entered into by the ring fence company paying for the relevant service and by the contractor.

The rule is the same as that provided for the hire cap in the new contractors ring fence and the same guidance provided for that legislation applies (OT50060).

The fact that a contractor has entered into, or has continued, arrangements which bring it within CTA 2010 Part 8ZA and has not entered into arrangements that would bring an oil producer within CTA2010\S285A is not of itself an arrangement to prevent the operation of CTA 2010\S285A.

However, if arrangements are entered into with a main purpose of avoiding both CTA 2010 Part 8ZA and CTA2010\S285A then both sets of provisions will be effective.