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).
Introduction Details of the Section