Corporation Tax Act 2009 section 677

Tax avoidance etc.

Section 677 prevents the European cross-border transfer of business rules in Chapter 9 from applying where the transfer lacks genuine commercial reasons or is carried out mainly to avoid tax.

• Chapter 9 does not apply if the transfer of business is not effected for genuine commercial reasons.
• Chapter 9 also does not apply if the transfer forms part of a scheme or arrangement 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 seek confirmation that the anti-avoidance rule will not block Chapter 9 from applying.
• If HMRC notify the companies that they are satisfied the anti-avoidance provision does not apply, Chapter 9 will continue to operate as normal.