Section 938Q | Meaning of “scheme loss” and “scheme profit”

(1)A loss or profit made by a company in an accounting period is a “scheme loss” or “scheme profit” in relation to a tax mismatch scheme if the loss or profit—

(a)arises from a transaction, or series of transactions, that forms part of the scheme,

(b)is, or is comprised in, an amount that is brought into account as a debit or credit for the purposes of Part 5 or 7 of CTA 2009, and

(c)meets the first or second asymmetry condition.

(2)The first asymmetry condition is that the loss or profit affects the amount of any relevant tax advantage secured by the scheme.

(3)Where, at the end of the accounting period—

(a)it is not certain whether the scheme will secure a relevant tax advantage, or

(b)it is not certain what the amount of the relevant tax advantage secured by the scheme will be,

a loss or profit is to be treated as meeting the first asymmetry condition if, at that time, there is a chance that the scheme will secure a relevant tax advantage and that the loss or profit will affect its amount.

(4)Where—

(a)a loss or profit meets the conditions in subsection (1)(a) and (b), and

(b)a part, but not the whole, of the loss or profit meets the first asymmetry condition,

only that part of the loss or profit is a “scheme loss” or “scheme profit”.

(5)The second asymmetry condition is that the loss or profit—

(a)does not meet the first asymmetry condition, but

(b)arises from a transaction, or series of transactions, that might (if events had turned out differently) have given rise to a loss or profit that would have done so.

(6)References in this section to a loss or profit include a loss or profit arising in respect of interest or expenses.

(7)In determining whether the condition in subsection (1)(b) or the first or second asymmetry condition is met, section 938O (scheme profits and losses to be left out of account) is to be disregarded.