Section 698C | Interpretation of section 698B ^F1

(1)This section applies for the interpretation of section 698B (and this section).

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

(3)Arrangements are “relevant avoidance arrangements” if their main purpose, or one of their main purposes, is to enable a company to obtain a derivative-related tax advantage.

(4)But arrangements are not “relevant avoidance arrangements” if the obtaining of any derivative-related tax advantages that would (in the absence of section 698B) arise from them can reasonably be regarded as consistent with any principles on which the provisions of this Part that are relevant to the arrangements are based (whether expressed or implied) and the policy objectives of those provisions.

(5)A company obtains a “derivative-related tax advantage” if—

(a)it brings into account a debit to which it would not otherwise be entitled,

(b)it brings into account a debit which exceeds that to which it would otherwise be entitled,

(c)it avoids having to bring a credit into account,

(d)the amount of any credit brought into account by the company is less than it would otherwise be, or

(e)it brings a debit or credit into account earlier or later than it otherwise would.

(6)In subsection (5), references to bringing a debit or credit into account are references to bringing a debit or credit into account for the purposes of this Part.