Section 492 | Holding coming within section 490: calculation to undo avoidance

(1)Subsection (2) applies if—

(a)section 490 applies for an accounting period of a company to a relevant holding held by the company,

(b)a relevant fund enters into any arrangements, or arrangements are entered into that in whole or part relate to a relevant fund, and

(c)the main purpose or one of the main purposes of the arrangements is to obtain a tax advantage for a person.

(2)The company must make adjustments to counteract any tax advantage connected in any way with the relevant holding that would (ignoring this section) be obtained by the company, or any other person, directly or indirectly in consequence of the arrangements or their being entered into.

(3)The arrangements may be ones entered into at a time when the company does not hold the relevant holding; and any person referred to in subsection (1)(c) need not be identified when the arrangements are entered into.

(4)The adjustments required by subsection (2) are such as are just and reasonable.

(5)In this section—

“arrangements” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions, and

“relevant fund” means—

(a)the open-ended investment company, unit trust scheme or offshore fund in which the relevant holding is held, or

(b)an open-ended investment company, unit trust scheme or offshore fund in which a relevant fund has a holding.