Corporation Tax Act 2010 section 230

No pre-arranged protection against risks

Section 230 is an anti-avoidance provision that ensures an investor is genuinely exposed to the normal risks of making an investment and has not arranged protection against those risks through insurance, indemnities, guarantees or other means.

• Any arrangements connected with or under which the investment is made must not include "excluded arrangements" designed to shield the investor from normal investment risks.
• Excluded arrangements are those whose main purpose (or one of whose main purposes) is to provide partial or complete protection for the investor against the risks that would normally attach to the investment, whether through insurance, indemnity, guarantee or otherwise.
• An exception applies where the protection provided is limited to the kind of risk protection that would reasonably be expected for commercial reasons if the investment were made as part of a banking business.
• The term "arrangements" is defined broadly to include any scheme, agreement or understanding, whether or not it is legally enforceable.