Paragraph 15 The “expected amount”

United Kingdom

(1)

For the purposes of the threshold test in paragraph 11(2), the “expected amount”, in relation to an uncertain amount, is the amount that it is reasonable to conclude the uncertain amount would be were the tax treatment applied in arriving at the amount—

(a)

where the uncertain amount is uncertain by virtue of paragraph 10(2), the different tax treatment for which provision has been recognised in the relevant accounts;

(b)

where the uncertain amount is uncertain by virtue of paragraph 10(3), a tax treatment that is wholly in accordance with HMRC’s known interpretation and application of the law.

(2)

Where more than one tax treatment is wholly in accordance with HMRC’s known interpretation and application of the law, sub-paragraph (1)(b) applies by reference to whichever of those treatments would give the least amount of tax advantage for the purposes of the threshold test.

(3)

Where sub-paragraph (1) gives more than one expected amount, because the uncertain amount is uncertain by virtue of both of sub-paragraphs (2) and (3) of paragraph 10, the threshold test applies by reference to whichever of those expected amounts would give the most amount of tax advantage.

(4)

Paragraph 10(4) applies for the purposes of sub-paragraph (1)(b) as it applies for the purposes of paragraph 10(3).