Corporation Tax Act 2010 section 757A

Application of Chapter

Section 757A sets out the conditions under which the anti-avoidance rules in Chapter 1A apply to arrangements where income rights are transferred through a partnership structure to obtain a tax advantage.

• The rules apply where a company (the transferor) effectively disposes of a right to income to another person (the transferee) by means of or through a partnership, and a main purpose of the arrangement is to obtain a tax advantage for any person.
• The transferor and transferee (or persons connected with them) must each be a member, at any time though not necessarily the same time, of the partnership used to effect the disposal, or of a partnership associated with it — and chains of partnerships cannot be used to circumvent the rules.
• A disposal includes anything treated as a disposal under capital gains tax legislation and can be effected by acquiring, disposing of, or changing an interest in the partnership, including a share of profits or assets.
• "Relevant receipts" means income that would otherwise have been taxable as the transferor's income for corporation tax purposes, and "tax advantage" is defined by reference to advantages relating to income tax or the corporation tax charge on income.