Section 371ED | Arrangements in lieu of dividends etc to UK resident companies etc

(1)Non-trading finance profits fall within this section so far as they arise from an arrangement ... in relation to which the following condition is met.

(2)The condition is that—

(a)the arrangement is made by the CFC (directly or indirectly)—

(i)with a UK resident company connected with the CFC, or

(ii)with a non-UK resident company connected with the CFC for the purposes of a UK permanent establishment of the non-UK resident company, and

(b)it is reasonable to suppose—

(i)that the arrangement is made as an alternative to the CFC paying dividends or making any other distribution to the other company (directly or indirectly), and

(ii)that the main reason, or one of the main reasons, for that is a reason relating to a liability, or potential liability, of any person to tax or duty imposed under the law of any territory.