Commentary on Sections Overview Chapter 11: Tax avoidance Section 693: Bringing into account adjustments under Schedule 28AA to ICTA
1917.This section brings into account under this Part credits and debits in respect of amounts treated under Schedule 28AA to ICTA (provision not at arm’s length) as profits, losses or expenses. It is based on paragraph 31A of Schedule 26 to FA 2002.
1918.It brings credits and debits into account to the extent that actual amounts of such profits, losses or expenses would be brought into account.
1919.Schedule 28AA to ICTA identifies adjustments (“imputed amounts”) to be made to return the profit or loss from a transaction between parties not at arm’s length to what that profit or loss would be had the parties been at arm’s length. This section ensures that such amounts are taken into account under this Part although they arise under Schedule 28AA rather than under this Part.
1920.Subsections (3) and (5) indicate that the credits and debits brought into account by this section are subject to the same rules as apply under this Part to credits and debits in respect of actual amounts. So, for example, debits brought into account in respect of expenses are those falling within the categories listed in section 595(4).