Part 4Real Estate Investment Trusts
Assets etc
C1C2117Cancellation of tax advantage
1
This section applies if the Commissioners for Her Majesty's Revenue and Customs think that a company to which this Part applies has tried to obtain a tax advantage for itself or another person.
2
The Commissioners may give a notice to the company specifying the tax advantage.
3
If the Commissioners give a notice to the company under subsection (2)—
a
a tax advantage obtained by the company shall be counteracted, in accordance with the notice, by an adjustment by way of—
i
an assessment;
ii
the cancellation of a right of repayment;
iii
a requirement to return a repayment already made;
iv
the computation or recomputation of profits or gains, or liability to tax, on a basis specified by the Commissioners in the notice, and
b
the Commissioners may (in addition to the adjustment under paragraph (a)) assess the company to such additional amount of corporation tax F5... as they think is equivalent to the value of the tax advantage.
4
For the purposes of this section “tax advantage” has the meaning given by F1section 840ZA of ICTA (and includes, in particular, entering into arrangements the sole or main purpose of which is to avoid or reduce a charge to tax under section 112).
5
But a company does not obtain a tax advantage by reason only of this Part applying to it, unless it does anything (whether before or during the application of this Part) which in the Commissioners' opinion is wholly or principally designed—
a
to create or inflate or apply a loss, deduction or expense (whether or not suffered or incurred by the company), or
b
to have another effect of a kind specified for the purposes of this subsection by regulations made by the Treasury.
6
Where a notice is given to a company under subsection (2), the company may appeal F4....
7
An appeal must be instituted by notice given in writing to the Commissioners for Her Majesty's Revenue and Customs during the period of 30 days beginning with the date on which the notice under subsection (2) is given to the company.
F28
On an appeal under subsection (7) F3that is notified to the tribunal, the tribunal may—
a
quash the notice,
b
affirm the notice, or
c
vary the notice.