Corporation Tax Act 2010 section 938R

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

Section 938R defines the key terms "relevant tax advantage", "relevant tax disadvantage" and "the scheme period" for the purposes of the tax mismatch schemes rules.

• A "relevant tax advantage" is a non-negligible economic profit made by a company over the scheme period that arises from asymmetries in how it accounts for debits and credits under the loan relationships or derivative contracts rules
• A "relevant tax disadvantage" is a non-negligible economic loss made by a company over the scheme period that arises from the same type of asymmetries
• Asymmetries include differences in both the amounts recognised (quantification) and when they are recognised (timing), and the concepts of economic profit and loss each encompass increases and decreases in the other
• The "scheme period" is simply the period during which the scheme has effect