Section 45T Exclusion of expenditure incurred under disqualifying arrangementsF1

(1)

Expenditure is not first-year qualifying expenditure under section 45S if the expenditure is incurred directly or indirectly in consequence of, or otherwise in connection with, disqualifying arrangements.

(2)

Arrangements are “disqualifying arrangements” for the purposes of this section if—

(a)

the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage connected with expenditure being first-year qualifying expenditure under section 45S (including securing the advantage by avoiding a balancing charge under section 59A or 59B or reducing the amount or timing of such a charge), and

(b)

it is reasonable, taking account of all the relevant circumstances—

(i)

to conclude that the arrangements are, or include steps that are, contrived, abnormal or lacking a genuine commercial purpose, or

(ii)

to regard the arrangements as circumventing the intended limits of relief under this Act or otherwise exploiting shortcomings in this Act.

(3)

In this section “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

Annotations

Textual amendments

F1: Ss. 45S, 45T inserted (22.2.2024) by Finance (No. 2) Act 2023 (c. 30), s. 7(3) (as amended by Finance Act 2024 (c. 3), s. 1(1)(2)(a))

Notes on Part 2

Modifications

C1: Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
C2: Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
C3: Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
C4: Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
C5: Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
C6: Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
C7: Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
C8: Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
C9: Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
C10: Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)

Notes on Chapter 4

Modifications

C1: Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)