Introduction Details of the Section
2.Subsection 1 adds new subsections (1A) and (4) to section 31 of the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 (trade profits: relationship between rules prohibiting and allowing deductions).
3.New subsection (1A) provides that in determining if a deduction is allowable in cases involving relevant tax avoidance arrangements, the order of priority is reversed so that a prohibitive rule will have priority over a permissive rule. This means that no deduction will be due if a prohibitive rule applies, notwithstanding that a deduction would otherwise be due under a permissive rule.
4.New subsection (4) defines relevant tax avoidance arrangements for the purposes of new subsection (1A).
5.Subsection 2 adds equivalent subsections to section 274 of ITTOIA 2005 (property businesses: relationship between rules prohibiting and allowing deductions).
6.Subsection 3 adds equivalent subsections to section 51 of the Corporation Tax Act (CTA) 2009 (trade profits: relationship between rules prohibiting and allowing deductions).
7.Subsection 4 adds equivalent subsections to section 214 of CTA 2009 (property businesses: relationship between rules prohibiting and allowing deductions).
8.Subsections (5) and (6) provide commencement rules.
9.Subsection (7) defines “an unconditional obligation” for the purposes of subsection (6).