Corporation Tax Act 2010 (c. 4)

Part 10 U.K. Close companies

[F1 CHAPTER 3A U.K. Charge to tax: other arrangements

Textual Amendments

F1 Pt. 10 Ch. 3A inserted (with retrospective effect in accordance with Sch. 30 para. 5(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 30 para. 5(1)

464A Charge to tax: arrangements conferring benefit on participator U.K.

(1) This section applies if—

(a) a close company is at any time a party to tax avoidance arrangements, and

(b) as a result of those arrangements, a benefit is conferred (whether directly or indirectly) on an individual who is—

(i) a participator in the company, or

(ii) an associate of such a participator.

(2) But this section does not apply if, or to the extent that, the conferral of the benefit gives rise to—

(a) a charge to tax on the company under section 455, or

(b) a charge to income tax on the participator or associate.

(3) There is due from the company, as if it were an amount of corporation tax chargeable on the company for the accounting period in which the benefit is conferred on the participator or associate, an amount equal to 25% of the value of the benefit conferred.

(4) Tax due under this section in relation to a benefit conferred on a participator or associate is due and payable in accordance with section 59D of TMA 1970 on the day following the end of the period of 9 months from the end of the accounting period in which the benefit was conferred.

(5) If a company (C) controls another company (D), a participator in C is to be treated for the purposes of this section as being also a participator in D.

(6) For the purposes of this section, arrangements are “tax avoidance arrangements” if the main purpose, or one of the main purposes, of the arrangements is—

(a) to avoid or reduce, or obtain a relief or increased relief from, a charge to tax on the company under section 455, or

(b) to obtain a tax advantage for the participator or associate.

(7) In this section—

• “arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions, and

• “tax advantage” has the meaning given in section 1139, reading references to tax in that section as references to income tax.]