Corporation Tax Act 2009 section 5A

Arrangements for avoiding tax

Section 5A is an anti-avoidance rule that prevents companies from using arrangements to avoid profits being brought into charge to corporation tax under the territorial scope provisions.

• Where a company enters into an arrangement with a main purpose of obtaining a corporation tax advantage relating to the territorial scope of charge, that advantage must be counteracted through adjustments.
• The rule also catches advantages obtained by exploiting double taxation agreements, unless the advantage is genuinely intended by the terms of the relevant treaty.
• Adjustments to counteract the tax advantage can be made by HMRC or by the company itself, through assessments, amendments, disallowance of claims, or other means.
• "Arrangement" is defined very broadly to include any agreement, understanding, scheme, transaction, or series of transactions, whether or not legally enforceable.