Section 809S | Section 809Q: anti-avoidance

(1)This section applies if, by reason of an arrangement the main purpose (or one of the main purposes) of which is to secure an income tax advantage or capital gains tax advantage, a mixed fund would otherwise be regarded as containing income or capital within any of paragraphs (f) to (i) of section 809Q(4).

(2)Treat the mixed fund as containing so much (if any) of the income or capital as is just and reasonable.

(3)“Arrangement” includes any scheme, understanding, transaction or series or transactions (whether or not enforceable).

(4)Income tax advantage” means—

(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, or

(d)the avoidance of a possible assessment to income tax;

...

(4A)For the purposes of subsection (4)(c) and (d) it does not matter whether the avoidance or reduction is effected—

(a)by receipts accruing in such a way that the recipient does not pay or bear income tax on them, or

(b)by a deduction in calculating profits or gains.

(5)“Capital gains tax advantage” means—

(a)a relief from capital gains tax or increased relief from capital gains tax,

(b)a repayment of capital gains tax or increased repayment of capital gains tax,

(c)the avoidance or reduction of a charge to capital gains tax or an assessment to capital gains tax, or

(d)the avoidance of a possible assessment to capital gains tax.