Section 127B | No relief for tax-generated agricultural expenses ^F1

(1)This section applies if—

(a)in a tax year a person makes a loss in a UK property business or overseas property business (whether carried on alone or in partnership),

(b)the business has a relevant agricultural connection for the purposes of section 120 (see section 123(3) to (7)), and

(c)any allowable agricultural expenses deducted in calculating the loss arise directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements.

(2)No property loss relief against general income may be given to the person for so much of the applicable amount of the loss as is attributable to expenses falling within subsection (1)(c).

(3)For the purposes of subsection (2), the applicable amount of the loss is to be treated as attributable to expenses falling within subsection (1)(c) before anything else.

(4)In subsection (1) “relevant tax avoidance arrangements” means arrangements—

(a)to which the person is a party, and

(b)the main purpose, or one of the main purposes, of which is the obtaining of a reduction in tax liability by means of property loss relief against general income.

(5)In subsection (4) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

(6)In this section “the applicable amount of the loss” has the meaning given by section 122 and “allowable agricultural expenses” has the meaning given by section 123.