Corporation Tax Act 2010 section 938D

Meaning of "relevant tax advantage" etc. and "the scheme period"

Section 938D defines what counts as a "relevant tax advantage", a "relevant tax disadvantage", and "the scheme period" for the purposes of the group mismatch scheme rules.

• A "relevant tax advantage" is a non-negligible economic profit made by the scheme group over the scheme period, arising from mismatches in how different group members account for debits and credits under the loan relationships or derivative contracts rules.
• A "relevant tax disadvantage" is the mirror image — a non-negligible economic loss made by the scheme group over the scheme period, arising from the same type of accounting mismatches.
• The mismatches (or "asymmetries") that can give rise to these advantages or disadvantages include differences in both the amounts recognised (quantification) and the timing of when amounts are brought into account.
• The "scheme period" is simply the period during which the scheme has effect, and the economic profit or loss must be assessed across the group as a whole over that entire period.