Section 214 | Relationship between rules prohibiting and allowing deductions

(1)Any relevant permissive rule in this Part—

(a)has priority over any relevant prohibitive rule, but

(b)is subject to the following provisions—

(i)section 56 (car ... hire), as applied by section 210,^F1

(ii)section 1288 (unpaid remuneration),

(iii)section 1290 (employee benefit contributions),

(iv)section 1304 (crime-related payments).

(1A)But, if the relevant permissive rule would allow a deduction in calculating the profits of a trade in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—^F2

(a)does not have priority under subsection (1)(a), and^F2

(b)is subject to any relevant prohibitive rule in this Part (and to the provisions mentioned in subsection (1)(b)).”, and^F2

(2)In this section “any relevant permissive rule in this Part” means any provision of this Part (apart from sections 231 to 234) which allows a deduction in calculating the profits of a property business.

(3)In this section “any relevant prohibitive rule”, in relation to any deduction, means any provision of this Part or Chapter 1 of Part 20 (apart from those mentioned in subsection (1)(b)) which might otherwise be read as—

(a)prohibiting or deferring the deduction, or

(b)restricting the amount of the deduction.

(3A)In this section “relevant tax avoidance arrangements” means arrangements—^F3

(a)to which the person carrying on the trade is a party, and^F3

(b)the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage (within the meaning of section 1139 of CTA 2010).^F3

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

(4)In this section any reference to any provision of this Part includes any provision applied by section 210.