Section 554Z11B | Earlier income tax liability: application of section 554Z11C ^F1F2

(1)Section 554Z11C applies if the conditions in subsections (2) and (3) are met.

(2)The first condition is that there is overlap between—

(a)the sum of money or asset (“sum or asset P”) which is the subject of the relevant step, and

(b)a sum of money or asset (“sum or asset Q”) by reference to which, on an occasion that occurred before the relevant step is taken, A became subject to a liability for income tax (“the earlier tax liability”).

(3)The second condition is that at the time the relevant step is taken—

(a)an amount is payable by a person (the “liable person”) in respect of the earlier tax liability, but the whole or part of that amount is unpaid and not otherwise accounted for, and

(b)the liable person has not agreed any terms with an officer of Revenue and Customs for the discharge of the earlier tax liability.

(4)For the purposes of this section there is overlap between sum or asset P and sum or asset Q so far as it is just and reasonable to conclude that—

(a)they are the same sum of money or asset, or

(b)sum or asset P directly, or indirectly, represents sum or asset Q.

(5)In subsection (2)(b)—

(a)the reference to A includes a reference to any person linked with A, and

(b)the reference to a liability for income tax does not include a reference to a liability for income tax arising by reason of section 175 (benefit of taxable cheap loan treated as earnings).