Corporation Tax Act 2010 section 733

Company liable to counteraction of corporation tax advantage

Section 733 identifies when a company becomes liable to have a corporation tax advantage counteracted as a result of one or more transactions in securities.

• A company falls within this section if it has obtained, or is in a position to obtain, a corporation tax advantage as a consequence of a transaction in securities (or the combined effect of multiple such transactions), provided one of the specified circumstances applies.
• The specified circumstances include: receiving consideration representing a company's assets, future receipts or trading stock (circumstance C); receiving consideration connected with a relevant company distribution (circumstance D); and receiving assets of a relevant company (circumstance E).
• A corporation tax advantage is also treated as arising from a transaction in securities if it results from the combined effect of that transaction (or transactions) together with the liquidation of a company.
• The section is subject to three important safeguards: an exception where no tax avoidance purpose is demonstrated; disapplication where the company makes a statutory declaration and HMRC sees no reason to take further action; and a tribunal determination that there is no prima facie case for the section to apply.