Commentary on Sections Overview
452.This Part rewrites sections 24 to 28 and 30 of, and Schedule 3 to, F(No 2)A 2005, which were enacted to counteract avoidance involving tax arbitrage (“the tax arbitrage provisions”).
453.Different jurisdictions have different tax regimes, and different tax regimes often treat the same transaction in different ways. Multinational groups can arrange their affairs to take advantage of such discrepancies: this practice is called “tax arbitrage”. In tax arbitrage, the multinational group benefits at the expense of one or more of the fiscs.
454.The provisions in this Part have to be specifically activated by a notice from HMRC.
455.In general, the tax arbitrage provisions apply where an arbitrage scheme using a hybrid entity or instrument results in:
	a double deduction for the same expense, or a UK deduction for the payer in circumstances where the recipient is not taxed on the receipt (because, for example, a tax credit has eliminated a liability to tax); or
	amounts being received by a company in a way that would not otherwise be taxable in the UK.
456.The hybrid entity or instrument will usually have been used deliberately to achieve one of these results.
457.The tax arbitrage provisions deal separately with deduction cases and receipts cases.
458.The sections in this Part are laid out in the following order.
	Section 231 introduces the Part.
	Sections 232 to 235 are about deduction notices.
	Sections 236 to 242 are about the kinds of schemes which may be counteracted by deduction notices.
	Sections 243 to 248 are about the consequences of deduction notices.
	Sections 249 to 254 are about receipt notices.
	Sections 255 to 257 make general provision about deduction notices and receipt notices.
	Sections 258 and 259 are interpretative.