Section 1179CI Disqualifying arrangements and non-commercial transactionsF1

United Kingdom

(1)

Subsections (2) and (3) apply if, at any time, a company is party to disqualifying arrangements in relation to anything that is, was or becomes a qualifying production (“the production”).

(2)

The company is not entitled to an expenditure credit under this Chapter in respect of the production for any accounting period.

(3)

Any relevant company tax return must be amended accordingly.

(4)

Subsection (5) applies if a transaction—

(a)

is attributable to arrangements (other than disqualifying arrangements) entered into otherwise than for genuine commercial reasons, and

(b)

would result in a company obtaining a relevant advantage.

(5)

The relevant advantage is to be counteracted by the making of just and reasonable adjustments to any amounts relevant to the calculation of the company’s entitlement to an expenditure credit under this Chapter.

(6)

Those adjustments may be made (for example) by way of amendment, assessment, or modification of an assessment.

(7)

For the purposes of this section, arrangements are disqualifying arrangements if their main purpose, or one of their main purposes, is to enable the company to obtain a relevant advantage.

(8)

But such arrangements are not disqualifying arrangements if the obtaining of that advantage as a result of the arrangements could reasonably be regarded as consistent with—

(a)

the principles (whether expressed or implied) on which the provisions of this Part are based, and

(b)

the policy objectives of those provisions.

(9)

For the purposes of this section, a company would obtain a relevant advantage if it would become entitled to an expenditure credit under this Chapter—

(a)

to which it would not otherwise be entitled, or

(b)

of a greater amount than that to which it would otherwise be entitled.

(10)

In this section, “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

Annotations

Textual amendments

F1: Pt. 14A inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 2 para. 1 (with Sch. 2 paras. 16(1), 17-25)