Section 137 Restriction on application of sections 135 and 136 : anti-avoidance.F8C1

This section applies in respect of arrangements relating to an exchange or scheme of reconstruction as regards which section 135 or 136 applies if the main purpose, or one of the main purposes, of the arrangements is to reduce or avoid liability to capital gains tax or corporation tax.

Any such reduction or avoidance that would (in the absence of this section) arise from such arrangements is to be counteracted by the making of such adjustments as are just and reasonable (in light of the reduction or avoidance).

This includes, in an appropriate case, disapplying section 135 or 136 insofar as is required to counteract the reduction or avoidance.

Any adjustments required to be made under this section (whether or not by an officer of Revenue and Customs) may be made by way of—

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If any tax assessed on a person (the chargeable person) by virtue of F4this section is not paid within 6 months from the date when it is payable, any other person who—

may, at any time within 2 years from the time when the tax became payable, be assessed and charged (in the name of the chargeable person) to all or, as the case may be, a corresponding part of the unpaid tax; and a person paying any amount of tax under this subsection shall be entitled to recover a sum of that amount from the chargeable person.

With respect to chargeable gains accruing in chargeable periods ending after such day as the Treasury may by order appoint, in subsection (4) above—

and after that subsection there shall be inserted—

“(4A)

The date referred to in subsection (4) above is whichever is the later of—

(a)

the date when the tax becomes due and payable by the chargeable person; and

(b)

the date when the assessment was made on the chargeable person.”

In this section references to shares or debentures include references to any interests or options to which this Chapter applies by virtue of F6section 135(5), 136(5) or 147.

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