Taxation (International and Other Provisions) Act 2010

250 The receipt scheme conditions

(1) This section sets out the receipt scheme conditions.

(2) Receipt scheme condition A is that a scheme makes or imposes provision as between the company and another person (“the paying party”) by means of a transaction or series of transactions.

(3) Receipt scheme condition B is that that provision includes the paying party making, by means of a transaction or series of transactions, a payment—

(a) which is a qualifying payment in relation to the company, and

(b) at least part of which is not an amount to which section 251 (amounts within corporation tax) applies.

(4) A payment is a qualifying payment in relation to a company for the purposes of this section and sections 251 to 254 if it constitutes a contribution to the capital of the company.

(5) Receipt scheme condition C is that on entering into the scheme the company and the paying party expected that a benefit would arise because at least part of the qualifying payment was not an amount to which section 251 applies.

(6) Receipt scheme condition D is that there is an amount in relation to the qualifying payment that—

(a) is a deductible amount, and

(b) is not set against any scheme income arising to the paying party for income tax purposes or corporation tax purposes.

(7) In subsection (6)—

• “deductible amount” means an amount that—

  (a)

  is available as a deduction for the purposes of the Tax Acts, or

  (b)

  may be deducted or otherwise allowed under the tax law of any territory outside the United Kingdom, and

• “scheme income” means income arising from the transaction or transactions forming part of the scheme.

(8) Section 253 (exception for dealers) specifies a case where receipt scheme condition D is treated as not met.