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Finance Act 2012

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This is the original version (as it was originally enacted).

Transactions to obtain allowances

This section has no associated Explanatory Notes

1For section 215 of CAA 2001 substitute—

215Transactions to obtain tax advantages

(1)Allowances under this Part are restricted under the applicable sections if B enters into a relevant transaction with S that either—

(a)has an avoidance purpose, or

(b)is part of, or occurs as a result of, a scheme or arrangement that has an avoidance purpose.

(2)Subsection (1)(b) may be satisfied—

(a)whether the scheme or arrangement was made before or after the relevant transaction was entered into, and

(b)whether or not the scheme or arrangement is legally enforceable.

(3)A transaction, scheme or arrangement has an “avoidance purpose” if the main purpose, or one of the main purposes, of a party in entering into the transaction, scheme or arrangement is to enable a person to obtain a tax advantage under this Part that would not otherwise be obtained.

(4)The reference in subsection (3) to obtaining a tax advantage that would not otherwise be obtained includes obtaining an allowance that is in any way more favourable to a person than the one that would otherwise be obtained.

(5)If the tax advantage is of a kind described in subsection (7), “the applicable sections” are sections 217 and 218ZA(5).

(6)Otherwise, “the applicable sections” are sections 217 and 218ZA(1) or, as the case may be, 218ZA(3).

(7)The kinds of tax advantage are—

(a)that an allowance to which B is entitled for a chargeable period is calculated using a percentage rate that is higher than the one that would otherwise be used, or

(b)that B is entitled to an allowance in respect of an amount of capital expenditure sooner than B would otherwise be entitled to it.

(8)If a transaction, scheme or arrangement involves—

(a)a tax advantage of a kind described in subsection (7), and

(b)a tax advantage not of such a kind,

subsections (5) and (6) have effect separately in relation to each tax advantage.

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