Corporation Tax Act 2010 section 127

Amounts excluded because of certain arrangements

Section 127 provides an anti-avoidance rule that excludes certain amounts from the EEA amount where arrangements have been entered into with the main purpose of securing group relief.

• Any amount arising from specific "arrangements" is excluded from the EEA amount used in calculating group relief entitlements.
• The exclusion does not apply to any part of the EEA amount that is attributable to a UK permanent establishment, as that part is dealt with separately under section 107.
• The key test is whether the main purpose of the arrangements is to secure group relief — if so, the amounts arising from those arrangements are excluded.
• This is an anti-avoidance measure designed to prevent contrived situations where arrangements are put in place primarily to generate or inflate group relief claims.