Taxation (International and Other Provisions) Act 2010

243 Consequences of deduction notices

(1) This section applies in relation to a transaction if—

(a) a deduction notice specifying the transaction is given to a company under section 232, and

(b) when the notice is given, each of the deduction scheme conditions is met in relation to the transaction.

(2) The company must calculate (or recalculate) its income or chargeable gains for the purposes of corporation tax, or its liability to corporation tax, for—

(a) the accounting period specified in the deduction notice, and

(b) any later accounting period.

(3) That calculation (or recalculation) must be done in accordance with—

(a) the rule in section 244 (the rule against double deduction), and

(b) the rule in section 248 (the rule against deduction for untaxable payments) if it applies (see section 245).

(4) But the company is treated as having complied with subsections (2) and (3), so far as the scheme specified in the deduction notice is concerned, if the company incorporates the necessary relevant adjustments in its company tax return for the accounting period specified in the notice.

(5) For the purposes of subsection (4), adjustments are relevant if they—

(a) treat all or part of a deduction allowable for corporation tax purposes as not being allowable, or

(b) treat all or part of an amount that for corporation tax purposes may be set off against profits in an accounting period as not falling to be set off.

(6) For the purposes of subsection (4), relevant adjustments are the necessary adjustments if—

(a) they are such adjustments as are necessary for counteracting those effects of the scheme that are referable to the purpose referred to in deduction scheme condition C (see section 233(4)), and

(b) as a result of their incorporation in the return, the company counteracts those effects.