Section 237D | Judicial ruling upholding asserted tax advantage: effect on conduct notice which is provisional

(1)Subsection (2) applies if at any time—

(a)a conduct notice which relies on a Case 3 relevant defeat (see section 237B(5)) is provisional, and

(b)a court or tribunal upholds a corresponding tax advantage which has been asserted in connection with any of the related arrangements to which that relevant defeat relates (see paragraph 5(2) of Schedule 34A).

(2)The conduct notice ceases to have effect when that judicial ruling becomes final.

(3)An authorised officer must give the person to whom the conduct notice was given a written notice stating that the conduct notice has ceased to have effect.

(4)For the purposes of this section, a tax advantage is “asserted” in connection with any arrangements if a person makes a return, claim or election on the basis that the tax advantage arises from those arrangements.In relation to the arrangements mentioned in paragraph (b) of subsection (1) “corresponding tax advantage” means a tax advantage corresponding to any tax advantage the counteraction of which contributed to the relevant defeat mentioned in that paragraph.

(5)For the purposes of this section a court or tribunal “upholds” a tax advantage if—

(a)the court or tribunal makes a ruling to the effect that no part of the tax advantage is to be counteracted, and

(b)that judicial ruling is final.

(6)For the purposes of this Part a judicial ruling is “final” if it is—

(a)a ruling of the Supreme Court, or

(b)a ruling of any other court or tribunal in circumstances where—

(i)no appeal may be made against the ruling,

(ii)if an appeal may be made against the ruling with permission, the time limit for applications has expired and either no application has been made or permission has been refused,

(iii)if such permission to appeal against the ruling has been granted or is not required, no appeal has been made within the time limit for appeals, or

(iv)if an appeal was made, it was abandoned or otherwise disposed of before it was determined by the court or tribunal to which it was addressed.

(7)In this section references to “counteraction” include anything referred to as a counteraction in any of Conditions A to F in paragraphs 11 to 16 of Schedule 34A.