Corporation Tax Act 2009 section 1216CL

Artificially inflated claims for additional deduction or tax credit

Section 1216CL is an anti-avoidance provision that prevents companies from claiming television production tax relief where the claims have been artificially inflated through contrived arrangements.

• Any transaction linked to arrangements entered into wholly or partly for a disqualifying purpose must be disregarded when calculating additional deductions or television tax credits
• A disqualifying purpose exists where the main object, or one of the main objects, of the arrangements is to enable a company to obtain a deduction or credit it would not otherwise receive, or a larger deduction or credit than it would otherwise be entitled to
• The provision targets both the creation of entirely new entitlements and the inflation of existing entitlements to additional deductions or television tax credits
• "Arrangements" is broadly defined and includes any agreement, understanding, scheme, transaction, or series of transactions, whether or not legally enforceable