Income Tax (Trading and Other Income) Act 2005

[F1 General U.K.

Textual Amendments

F1 Pt. 5 Ch. 2A inserted (with effect in accordance with Sch. 3 para. 7 of the amending Act) by Finance Act 2019 (c. 1), Sch. 3 para. 4 (with Sch. 3 para. 8)

608W Anti-avoidance U.K.

(1) This section applies if a person has entered into any arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for the person as a result (wholly or partly) of—

(a) anything not being subject to the charge under section 608A, or

(b) any provisions of double taxation arrangements having effect in a case where the advantage is contrary to the object and purpose of the provisions.

(2) The tax advantage is to be counteracted by the making of such adjustments as are just and reasonable.

(3) The adjustments may be made (whether by an officer of Revenue and Customs or the person) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.

(4) Where this section applies by virtue of subsection (1)(b), the counteraction has effect despite section 6(1) of TIOPA 2010.

(5) In this [F2 Chapter] “tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(c) avoidance or reduction of a charge to tax or an assessment to tax,

(d) avoidance of a possible assessment to tax,

(e) deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

Textual Amendments

F2 Word in s. 608W(5) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019 (S.I. 2019/1452), regs. 1(1), 13

608X Interaction with other general provisions U.K.

(1) This section applies where section 608A applies in relation to a person for a tax year (or would apply, if the following provisions of this section applied).

(2) Part 6 (exempt income) does not apply in relation to UK-derived amounts arising to the person in the tax year.

(3) For the purposes of calculating the person's liability to income tax for the tax year—

(a) Chapter 1 of Part 14 of ITA 2007 (limits on liability to income tax of non-residents) does not apply in relation to UK-derived amounts arising to the person in the tax year;

(b) accordingly, the person's liability is the sum of—

(i) the person's liability as regards UK-derived amounts (with that Chapter not applying), and

(ii) the person's liability as regards anything else (with that Chapter applying, to the extent it would otherwise apply).

608Y Appeals against assessments U.K.

(1) This section applies where a person (“the taxpayer”) makes an appeal in relation to an amount of income tax charged on the taxpayer under section 608A.

(2) Section 55(3) to (8A) of TMA 1970 (application for postponement of payment of tax pending appeal) do not apply in relation to the tax charged (and no agreement as to the postponement of payment of any of that tax, or of interest on it, may be made).

(3) In the case of a further appeal, the relevant court or tribunal (as defined by section 56 of TMA 1970) may, on the application of Her Majesty's Revenue and Customs, direct that section 56(2) of TMA 1970 does not apply to the tax charged.

(4) A direction may be given if the relevant court or tribunal considers it necessary for the protection of the revenue.

(5) Nothing in this section applies in relation to a liability arising as a result of the giving of a notice under section 608O.]