Part 5Loan Relationships

Chapter 15Tax avoidance

Transactions not at arm's length: general

445Disapplication of section 444 where F1Part 4 of TIOPA 2010 applies

(1)

Section 444 does not apply, and F2Part 4 of TIOPA 2010 (provision not at arm's length) applies instead, to credits or debits in respect of amounts which—

(a)

fall to be adjusted for tax purposes under F3that Part, or

(b)

are within F3that Part without falling to be so adjusted (see subsection (3)).

(2)

Subsection (1) applies despite section 464 (amounts brought into account under this Part excluded from being otherwise brought into account), but is subject to—

(a)

section 340(7) (disapplication of F4Part 4 of TIOPA 2010 where group member replaces another as party to loan), and

(b)

section 447(5) (disapplication of F5that Part for exchange gains and losses).

(3)

For the purposes of subsection (1), an amount is within F6Part 4 of TIOPA 2010 without falling to be adjusted under it in a case where—

F7(a)

the condition in section 147(1)(a) of TIOPA 2010 is met,

(aa)

the participation condition is met (see subsection (3A)), and

(b)

the actual provision does not differ from the arm's length provision.

F8(3A)

Section 148 of TIOPA 2010 (when the participation condition is met) applies for the purposes of subsection (3)(aa) as it applies for the purposes of section 147(1)(b) of TIOPA 2010.

(4)

For the way in which this Part applies where adjustments are made under F9Part 4 of TIOPA 2010, see section 446.

(5)

In this section “the actual provision” and “the arm's length provision” have the same meaning as in F10Part 4 of TIOPA 2010 (see sections 149 and 151 of that Act).