Corporation Tax Act 2009 section 426

Tax avoidance etc.

Section 426 prevents the transfer of business rules in this Chapter from applying where the transfer lacks genuine commercial reasons or is motivated by tax avoidance, unless HMRC has given prior clearance.

• The Chapter's reliefs are denied if a business transfer is not carried out for genuine commercial reasons.
• The Chapter's reliefs are also denied if the transfer forms part of arrangements where a main purpose is avoiding corporation tax, capital gains tax or income tax.
• Companies can apply to HMRC before the transfer takes place to obtain clearance that the anti-avoidance rule will not block the relief.
• If HMRC confirms it is satisfied the anti-avoidance rule does not apply, the Chapter continues to operate normally for that transfer.