Section 184H | Avoidance involving losses: schemes securing deductions ^F1

(1)This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied.^F1

(2)Condition A is that—^F1

(a)a chargeable gain (the “relevant gain”) accrues to a company (“the relevant company”) directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and^F1

(b)losses accrue (or have accrued) to the relevant company ... (whether before or after or as part of the arrangements).^F1F2

(3)Condition B is that the relevant company, or a company connected with the relevant company, becomes entitled to an income deduction directly or indirectly in consequence of, or otherwise in connection with, the arrangements.^F1F3

(4)Condition C is that the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage that involves both—^F1

(a)that income deduction, and^F1F4

(b)the deduction of any of the losses from the relevant gain,^F1

whether or not it also involves anything else.

(5)Condition D is that the arrangements are not excluded arrangements. For this purpose arrangements are excluded arrangements if—^F1

(a)the arrangements are made in respect of land or any estate or interest in land,^F1

(b)the arrangements fall within section 835(1) or 836(1) of CTA 2010 (sale and lease-back: limitation on tax reliefs),^F1F5

(c)the person to whom the payment mentioned in that subsection is payable is not a company connected with the relevant company, and^F1

(d)the arrangements are made between persons dealing at arm's length.^F1

(6)If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the company a notice in respect of the arrangements (but see also section 184I).^F1

(7)If, when the notice is given, conditions A to D are satisfied, no loss accruing to the company at any time is to be deductible from the relevant gain.^F1

(8)A notice under this section must—^F1

(a)specify the arrangements,^F1

(b)specify the accounting period in which the relevant gain accrues, and^F1

(c)inform the relevant company of the effect of this section.^F1

(9)If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned.^F1

(10)In this section—^F1F6

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

“income deduction” means—

(a)a deduction in calculating income for corporation tax purposes, or

(b)a deduction from total profits,

“tax advantage” has the meaning given by section 184D.

(11)For the purposes of this section it does not matter whether the tax advantage is secured for the relevant company or for any other company.^F1