Part 4

Property income
Chapter 3

Profits of property businesses: basic rules

Calculation of profits

Relationship between rules prohibiting and allowing deductions
214
1
Any relevant permissive rule in this Part—
a
has priority over any relevant prohibitive rule, but
b
is subject to the following provisions—
i
section 56 (car ... hire), as applied by section 210,
ii
section 1288 (unpaid remuneration),
iii
section 1290 (employee benefit contributions),
iv
section 1304 (crime-related payments).
1A
But, if the relevant permissive rule would allow a deduction in calculating the profits of a trade in respect of an amount which arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements, that rule—
a
does not have priority under subsection (1)(a), and
b
is subject to any relevant prohibitive rule in this Part (and to the provisions mentioned in subsection (1)(b)).”, and
2
In this section “any relevant permissive rule in this Part” means any provision of this Part (apart from sections 231 to 234) which allows a deduction in calculating the profits of a property business.
3
In this section “any relevant prohibitive rule”, in relation to any deduction, means any provision of this Part or Chapter 1 of Part 20 (apart from those mentioned in subsection (1)(b)) which might otherwise be read as—
a
prohibiting or deferring the deduction, or
b
restricting the amount of the deduction.
3A
In this section “
relevant tax avoidance arrangements
” means arrangements—
a
to which the person carrying on the trade is a party, and
b
the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage (within the meaning of section 1139 of CTA 2010).
“
Arrangements
” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
4
In this section any reference to any provision of this Part includes any provision applied by section 210.
S. 214(3A) inserted (with effect in accordance with s. 78(5)-(7) of the amending Act) by Finance Act 2013 (c. 29), s. 78(4)(b)
Words in s. 214(1)(b)(i) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the commencing Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 53
S. 214(1A) inserted (with effect in accordance with s. 78(5)-(7) of the amending Act) by Finance Act 2013 (c. 29), s. 78(4)(a)