Corporation Tax Act 2009 section 455D

Examples of results that may indicate exclusion not applicable

Section 455D provides illustrative examples of outcomes that may suggest certain tax avoidance arrangements involving loan relationships should not benefit from the exclusion that would otherwise take them outside the scope of the anti-avoidance rules in section 455B.

• Arrangements that artificially reduce taxable profits or create or inflate losses from loan relationships, where the economic reality does not support such outcomes, may indicate the exclusion does not apply
• Preventing, delaying or manipulating the recognition of profit or loss items in accounts, or altering the accounting treatment of a loan relationship through other transactions within the arrangements, can also be indicators
• Bringing into account exchange losses or fair value losses where corresponding gains would not produce an equivalent credit, or manipulating the connected parties rules to reduce credits or increase debits, are further examples of suspect results
• These indicators are only relevant if it is reasonable to assume the outcome in question was not the result Parliament anticipated when the relevant loan relationships legislation was enacted