Corporation Tax Act 2009

Chapter 17 Priority rules

464 Priority of this Part for corporation tax purposes

(1) The amounts which are brought into account in accordance with this Part in respect of any matter are the only amounts which may be brought into account for corporation tax purposes in respect of it.

(2) Subsection (1) is subject to any express provision to the contrary.

(3) For further provisions relating to the rule in this section, see in particular—

(a) section 445(2) (disapplication of section 444 where Schedule 28AA to ICTA applies),

(b) section 465 (exclusion of distributions except in tax avoidance cases),

(c) section 700 (relationship of Part 7 to this Part),

(d) section 400(9A) of ICTA (write-off of government investment),

(e) section 494 of ICTA (petroleum extraction activities: loan relationships),

(f) section 795(4) of ICTA (computation of income subject to foreign tax),

(g) section 811(3) of ICTA (deduction for foreign tax where no credit available),

(h) section 83(2ZA) of FA 1989 (life assurance: receipts to be taken into account), and

(i) paragraph 3(5) of Schedule 12 to F(No.2)A 1992 (banks etc in compulsory liquidation: taxation of certain receipts).

(4) See also the following sections (under which amounts prevented from being brought into account under this Part are treated as if they were so brought into account for the purposes of this section)—

(a) section 327(5) and (6) (disallowance of imported losses etc), and

(b) section 441(4) and (5) (loan relationships for unallowable purposes).

465 Exclusion of distributions except in tax avoidance cases

(1) Credits or debits relating to any amount falling, when paid, to be treated as a distribution must not be brought into account for the purposes of this Part, except, in the case of credits, so far as they are avoidance arrangement amounts (see subsection (4)).

(2) Nothing in section 464(1) prevents amounts that are not brought into account because of subsection (1) from being brought into account for corporation tax purposes otherwise than under this Part.

(3) But see the following provisions (under which some amounts are prevented from being distributions for corporation tax purposes and accordingly are within this Part)—

(a) section 523(2)(b) (shares subject to outstanding third party obligations and non-qualifying shares),

(b) section 209(6A) of ICTA (relevant alternative finance return under alternative finance arrangements),

(c) section 477A(3)(b) of ICTA (building society dividends etc), and

(d) section 486(1) and (9) of ICTA (dividends, bonuses and other sums payable to shareholders in registered industrial and provident societies and UK agricultural or fishing co-operatives).

(4) For the purposes of this section an amount is an avoidance arrangement amount if it arises in consequence of, or otherwise in connection with, arrangements of which the purpose, or one of the main purposes, is securing a tax advantage for any person.

(5) In this section “arrangements” includes any scheme, agreement or understanding, transaction or series of transactions.