Corporation Tax Act 2010 section 357UE

Transactions not entered into for genuine commercial reasons

Section 357UE extends the anti-avoidance rule for non-commercial transactions relating to theatrical productions so that it also covers Northern Ireland supplementary deductions.

• The Corporation Tax Act 2009 contains an anti-avoidance rule (section 1217LB) that can deny additional tax deductions where transactions relating to theatrical productions are not entered into for genuine commercial reasons.
• Section 357UE extends this rule so that it also applies to Northern Ireland supplementary deductions available under this chapter.
• This means that if a transaction is found not to have been entered into for genuine commercial reasons, HMRC can deny both the standard additional deduction and the Northern Ireland supplementary deduction.
• The effect is to prevent companies from structuring artificial or non-commercial transactions to exploit the Northern Ireland supplementary deduction regime for theatrical productions.