Textual Amendments
F1Sch. 34A inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 160(5)
2(1)For the purposes of this Part of this Act, separate arrangements which persons have entered into are “related” to one another if (and only if) they are substantially the same.U.K.
(2)Sub-paragraphs (3) to (6) set out cases in which arrangements are to be treated as being “substantially the same” (if they would not otherwise be so treated under sub-paragraph (1)).
(3)Arrangements to which the same reference number has been allocated under Part 7 of FA 2004 (disclosure of tax avoidance schemes) are treated as being substantially the same.
For this purpose arrangements in relation to which information relating to a reference number has been provided in compliance with section 312 of FA 2004 are treated as arrangements to which that reference number has been allocated under Part 7 of that Act.
(4)Arrangements to which the same reference number has been allocated under paragraph 9 of Schedule 11A to VATA 1994 (disclosure of avoidance schemes) [F2or paragraph 22 of Schedule 17 to FA 2017 (disclosure of avoidance schemes: VAT and other indirect taxes)] are treated as being substantially the same.
(5)Any two or more sets of arrangements which are the subject of follower notices given by reference to the same judicial ruling are treated as being substantially the same.
(6)Where a notice of binding has been given in relation to any arrangements (“the bound arrangements”) on the basis that they are, for the purposes of Schedule 43A to FA 2013, equivalent arrangements in relation to another set of arrangements (the “lead arrangements”)—
(a)the bound arrangements and the lead arrangements are treated as being substantially the same, and
(b)the bound arrangements are treated as being substantially the same as any other arrangements which, as a result of this sub-paragraph, are treated as substantially the same as the lead arrangements.
Textual Amendments
F2Words in Sch. 34A para. 2(4) inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(2)
3(1)For the purposes of this Schedule arrangements are “promoted arrangements” in relation to a person if—U.K.
(a)they are relevant arrangements or would be relevant arrangements under the condition stated in sub-paragraph (2), and
(b)the person is carrying on a business as a promoter and—
(i)the person is or has been a promoter in relation to the arrangements, or
(ii)that would be the case if the condition in sub-paragraph (2) were met.
(2)That condition is that the definition of “tax” in section 283 includes, and has always included, value added tax.
4(1)A defeat of arrangements (entered into by any person) which are promoted arrangements in relation to a person (“the promoter”) is a “relevant defeat” in relation to the promoter if the condition in sub-paragraph (2) is met.U.K.
(2)The condition is that the arrangements are not related to any other arrangements which are promoted arrangements in relation to the promoter.
(3)For the meaning of “defeat” see paragraphs 10 to 16.
5(1)This paragraph applies if arrangements (entered into by any person) (“Set A”)—U.K.
(a)are promoted arrangements in relation to a person (“P”), and
(b)are related to other arrangements which are promoted arrangements in relation to P.
(2)If Case 1, 2 or 3 applies (see paragraphs 7 to 9) a relevant defeat occurs in relation to P and each of the related arrangements.
(3)“The related arrangements” means Set A and the arrangements mentioned in sub-paragraph (1)(b).
6U.K.In relation to a person, if there has been a relevant defeat of arrangements (whether under paragraph 4 or 5) there cannot be a further relevant defeat of—
(a)those particular arrangements, or
(b)arrangements which are related to those arrangements.
7(1)Case 1 applies if—U.K.
(a)any of Conditions A to E is met in relation to any of the related arrangements, and
(b)in the case of those arrangements the decision to make the relevant counteraction has been upheld by a judicial ruling (which is final).
(2)In sub-paragraph (1) “the relevant counteraction” means the counteraction mentioned in paragraph 11(d), 12(1)(b), 13(1)(d), 14(1)(d) or 15(1)(d) (as the case requires).
8U.K.Case 2 applies if Condition F is met in relation to any of the related arrangements.
9(1)Case 3 applies if—U.K.
(a)at least 75% of the tested arrangements have been defeated, and
(b)no final judicial ruling in relation to any of the related arrangements has upheld a corresponding tax advantage which has been asserted in connection with any of the related arrangements.
(2)In this paragraph “the tested arrangements” means so many of the related arrangements (as defined in paragraph 5(3)) as meet the condition in sub-paragraph (3) or (4).
(3)Particular arrangements meet this condition if a person has made a return, claim or election on the basis that a tax advantage results from those arrangements and—
(a)there has been an enquiry or investigation by HMRC into the return, claim or election, or
(b)HMRC assesses the person to tax on the basis that the tax advantage (or any part of it) does not arise, or
(c)a GAAR counteraction notice has been given in relation to the tax advantage or part of it and the arrangements.
(4)Particular arrangements meet this condition if HMRC takes other action on the basis that a tax advantage which might be expected to arise from those arrangements, or is asserted in connection with them, does not arise.
(5)For the purposes of this paragraph a tax advantage has been “asserted” in connection with particular arrangements if a person has made a return, claim or election on the basis that the tax advantage arises from those arrangements.
(6)In sub-paragraph (1)(b) “corresponding tax advantage” means a tax advantage corresponding to any tax advantage the counteraction of which is taken into account by HMRC for the purposes of sub-paragraph (1)(a).
(7)For the purposes of this paragraph a court or tribunal “upholds” a tax advantage if—
(a)the court or tribunal makes a ruling to the effect that no part of the tax advantage is to be counteracted, and
(b)that judicial ruling is final.
(8)In this paragraph references to “counteraction” include anything referred to as a counteraction in any of Conditions A to F in paragraphs 11 to 16.
(9)In this paragraph “GAAR counteraction notice” means—
(a)a notice such as is mentioned in sub-paragraph (2) of paragraph 12 of Schedule 43 to FA 2013 (notice of final decision to counteract),
(b)a notice under paragraph 8(2) or 9(2) of Schedule 43A to that Act (pooling or binding of arrangements) stating that the tax advantage is to be counteracted under the general anti-abuse rule, or
(c)a notice under paragraph 8(2) of Schedule 43B to that Act (generic referrals) stating that the tax advantage is to be counteracted under the general anti-abuse rule.
10U.K.For the purposes of this Part of this Act a “defeat” of arrangements occurs if any of Conditions A to F (in paragraphs 11 to 16) is met in relation to the arrangements.
11U.K.Condition A is that—
(a)a person has made a return, claim or election on the basis that a tax advantage arises from the arrangements,
(b)a notice given to the person under paragraph 12 of Schedule 43 to, paragraph 8(2) or 9(2) of Schedule 43A to or paragraph 8(2) of Schedule 43B to FA 2013 stated that the tax advantage was to be counteracted under the general anti-abuse rule,
(c)the tax advantage has been counteracted (in whole or in part) under the general anti-abuse rule, and
(d)the counteraction is final.
12(1)Condition B is that a follower notice has been given to a person by reference to the arrangements (and not withdrawn) and—U.K.
(a)the person has complied with subsection (2) of section 208 of FA 2014 by taking the action specified in subsections (4) to (6) of that section in respect of the denied tax advantage (or part of it), or
(b)the denied tax advantage has been counteracted (in whole or in part) otherwise than as mentioned in paragraph (a) and the counteraction is final.
(2)In this paragraph “the denied tax advantage” is to be interpreted in accordance with section 208(3) of FA 2014.
(3)In this Schedule “follower notice” means a follower notice under Chapter 2 of Part 4 of FA 2014.
13(1)Condition C is that—U.K.
(a)the arrangements are DOTAS arrangements,
(b)a person (“the taxpayer”) has made a return, claim or election on the basis that a relevant tax advantage arises,
(c)the relevant tax advantage has been counteracted, and
(d)the counteraction is final.
(2)For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the taxpayer to obtain.
(3)For the purposes of this paragraph the relevant tax advantage is “counteracted” if adjustments are made in respect of the taxpayer's tax position on the basis that the whole or part of that tax advantage does not arise.
14(1)Condition D is that—U.K.
(a)the arrangements are disclosable VAT [F3or other indirect tax] arrangements to which a F4... person is a party,
(b)the F5... person has made a return or claim on the basis that a relevant tax advantage arises,
(c)the relevant tax advantage has been counteracted, and
(d)the counteraction is final.
(2)For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the F6... person to obtain.
(3)For the purposes of this paragraph the relevant tax advantage is “counteracted” if adjustments are made in respect of the F7... person's tax position on the basis that the whole or part of that tax advantage does not arise.
Textual Amendments
F3Words in Sch. 34A para. 14(1)(a) inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(a)
F4Word in Sch. 34A para. 14(1)(a) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)
F5Word in Sch. 34A para. 14(1)(b) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)
F6Word in Sch. 34A para. 14(2) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)
F7Word in Sch. 34A para. 14(3) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)
15(1)Condition E is that the arrangements are disclosable VAT arrangements to which a taxable person (“T”) is a party and—U.K.
(a)the arrangements relate to the position with respect to VAT of a person other than T (“S”) who has made supplies of goods or services to T,
(b)the arrangements might be expected to enable T to obtain a tax advantage in connection with those supplies of goods or services,
(c)the arrangements have been counteracted, and
(d)the counteraction is final.
(2)For the purposes of this paragraph the arrangements are “counteracted” if—
(a)HMRC assess S to tax or take any other action on a basis which prevents T from obtaining (or obtaining the whole of) the tax advantage in question, or
(b)adjustments are made on a basis such as is mentioned in paragraph (a).
16(1)Condition F is that—U.K.
(a)a person has made a return, claim or election on the basis that a relevant tax advantage arises,
(b)the tax advantage, or part of the tax advantage would not arise if a particular avoidance-related rule (see paragraph 25) applies in relation to the person's tax affairs,
(c)it is held in a judicial ruling that the relevant avoidance-related rule applies in relation to the person's tax affairs, and
(d)the judicial ruling is final.
(2)For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the person to obtain.]