What does 'arrangements' mean under section 156 of the Corporation Tax Act 2010?

Under section 156, 'arrangements' is defined very broadly to cover any kind of arrangement, whether written or oral, formal or informal. However, the definition excludes governmental directions to statutory bodies regarding asset disposals, and conditions imposed by or agreed with ministers or statutory bodies, so that public oversight does not trigger the anti-avoidance provisions.

What is a 'statutory body' for the purposes of sections 154 to 155B of the Corporation Tax Act 2010?

A statutory body is an organisation established by or under legislation to carry out functions conferred by statute. It does not include a company as defined by section 1(1) of the Companies Act 2006. The Treasury may make an order specifying whether a particular body is or is not to be treated as a statutory body, providing flexibility for borderline cases.

When is a company treated as the successor of another company under section 156?

A company is treated as the successor of another if it carries on all or part of a trade the other company previously carried on. This applies where the trade transfer rules in Chapter 1 of Part 22 treat them as successor and predecessor, or where the two companies are connected persons as defined in section 1122 of the Corporation Tax Act 2010.

Can an informal or unwritten understanding trigger the anti-avoidance rules in sections 154 to 155B?

Yes. Because 'arrangements' is defined to include arrangements of any kind whether written or not, even an informal or unwritten understanding between parties — such as an oral agreement between shareholders and a potential buyer regarding a change in group membership — can trigger the anti-avoidance restrictions on group relief under sections 154 to 155B.

Corporation Tax Act 2010 section 156

Sections 154 and 155: supplementary

Section 156 provides supplementary definitions and rules that support the anti-avoidance provisions in sections 154 to 155B, which restrict group relief where arrangements exist or could exist for changes in company ownership or group membership.

"Arrangements" is defined very broadly to cover arrangements of any kind, whether written or not, but excludes certain governmental directions to statutory bodies and conditions imposed by or agreed with ministers or statutory bodies.
A "statutory body" is one established by law to carry out statutory functions, but does not include a company as defined by the Companies Act 2006 — the Treasury may specify by order whether a particular body is or is not a statutory body for this purpose.
A company is treated as the "successor" of another if it carries on all or part of a trade formerly carried on by that other company, and either the trade transfer rules in Chapter 1 of Part 22 apply or the two companies are connected persons within the meaning of section 1122.
The definitions of "connected persons" and "control" are not repeated here because they are covered by the act-wide definitions elsewhere in the legislation.

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