Section 34 | Reduction in credit: payment by reference to foreign tax

(1)Subsection (2) applies if—

(a)credit for foreign tax is to be allowed to a person (“P”) under the arrangements, and

(b)a tax authority makes a payment by reference to that tax, and that payment—

(i)is made to P or a person connected with P, or

(ii)is made to some other person directly or indirectly in consequence of a scheme that has been entered into.

(2)The amount of that credit is to be reduced by an amount equal to that payment.

(3)Whether a person is connected with P is determined in accordance with section 1122 of CTA 2010.

(4)In subsection (1)(b)(ii) “scheme” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.