Part 2Trading income
Chapter 2Income taxed as trade profits
F1Trading income provided through third parties
23AApplication of section 23E: conditions
(1)
Section 23E (tax treatment of relevant benefits) applies if Conditions A to E are met.
(2)
Condition A is that a person (“T”) is or has been carrying on a trade (the “relevant trade”) alone or in partnership.
(3)
Condition B is that—
(a)
there is an arrangement (“the arrangement”) in connection with the relevant trade to which T is a party or which otherwise (wholly or partly) covers or relates to T, and
(b)
it is reasonable to suppose that, in essence—
(i)
the arrangement, or
(ii)
the arrangement so far as it covers or relates to T,
is (wholly or partly) a means of providing, or is otherwise concerned with the provision of, relevant benefits.
(4)
Condition C is that—
(a)
a relevant benefit arises to T, or a person who is or has been connected with T, in pursuance of the arrangement, or
(b)
a relevant benefit arises to any other person in pursuance of the arrangement and any of the enjoyment conditions (see section 23F) is met in relation to the relevant benefit.
(5)
Condition D is that it is reasonable to suppose that the relevant benefit (directly or indirectly) represents, or has arisen or derives from, or is otherwise connected with, the whole or part of a qualifying third party payment.
(6)
Condition E is that it is reasonable to suppose that a tax advantage would be obtained by T, or a person who is or has been connected with T, as a result of the arrangement.
(7)
For the purposes of subsection (3) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter.
(8)
In this section and sections 23B to 23H, “this group of sections” means this section and those sections.
(9)
The provisions of this group of sections apply to professions and vocations as they apply to trades.
(10)
See Schedule 12 to F(No.2)A 2017 for provision about the application of this group of sections in relation to loans and quasi-loans that are outstanding on 5 April 2019.