Corporation Tax Act 2010 section 545

Cancellation of tax advantage

Section 545 gives HMRC officers the power to counteract tax advantages obtained by companies that are, or are members of, a UK REIT where the company has tried to obtain an improper tax benefit.

• An HMRC officer may issue a notice to a UK REIT company specifying a tax advantage the company has tried to obtain for itself or another person
• The tax advantage can be counteracted by assessment, cancelling repayment rights, requiring return of repayments already made, or recalculating profits, gains or tax liability
• In addition to counteracting the advantage, HMRC may assess the company to an amount of corporation tax or income tax equivalent to the value of the tax advantage
• Simply being a UK REIT does not constitute obtaining a tax advantage — the company must have deliberately done something designed to create, inflate or apply a loss, deduction or expense, or to achieve another effect specified by Treasury regulations