Details of the Section
2.Subsection (1) sets out the conditions that give rise to taxable diverted profits where a UK resident company enters into transactions that lack economic substance or involve entities that lack such substance. The section does not apply if both the company and another person involved in the transactions are small or medium enterprises.
3.Subsection (2) makes clear that, for the purposes of considering whether the condition in subsection(1)(b) is met, where the UK resident company is a member of a partnership, transactions entered into between the partnership and another person are to be treated as if they were entered into between the UK resident company and that other person.
