Introduction Background
10.The Government has become aware of avoidance activity that seeks to exploit the priority rules for deductions from profits and intended to generate artificial loss relief for use by companies to reduce their corporation tax profits. This avoidance activity puts at risk substantial amounts of revenue.
11.It was announced on 21 December 2012 that legislation would be introduced, with effect from that date, to counter this avoidance by inserting targeted anti-avoidance rules in the income tax and corporation tax provisions governing the relationship between rules prohibiting and allowing deductions from profits of a trade or property business.