Corporation Tax Act 2009 section 698C

Interpretation of section 698B

Section 698C defines the key terms used in section 698B's anti-avoidance rule for derivative contracts, including what constitutes "arrangements", "relevant avoidance arrangements", and a "derivative-related tax advantage".

• "Arrangements" is defined very broadly, covering any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable
• Arrangements are "relevant avoidance arrangements" if a main purpose is to enable a company to obtain a derivative-related tax advantage, but not if the advantages are consistent with the principles and policy objectives of the derivative contracts legislation
• A "derivative-related tax advantage" includes claiming unwarranted debits, inflating debits, avoiding or reducing credits, or shifting the timing of debits or credits under Part 7
• The safe harbour exclusion means that arrangements which achieve results that Parliament intended when designing the derivative contracts rules will not be caught by the anti-avoidance provision