What does 'arrangements' mean under section 962 of the Corporation Tax Act 2010?

Under section 962 of the Corporation Tax Act 2010, 'arrangements' is given a deliberately broad meaning. It covers any kind of agreement, scheme, understanding, or plan, regardless of whether it has been set down in writing. This ensures that informal or oral agreements are caught just as much as formal written contracts.

How is 'firm' defined for the purposes of this Chapter of CTA 2010?

References to a 'firm' in this Chapter carry the same meaning as in Part 17 of the Corporation Tax Act 2009, which deals with partnerships. The 'accounting period of a firm' means the accounting period of the company that is deemed to carry on the firm's trade, ensuring consistency between the two Acts.

Where is 'connected person' defined for the purposes of this Chapter?

The term 'connected person,' which appears elsewhere in the Chapter, takes its meaning from section 1122 of the Corporation Tax Act 2010. Although not defined within section 962 itself, accountants should refer to section 1122 when determining whether parties are connected for the purposes of these provisions.

Why are the definitions in section 962 important for anti-avoidance provisions?

The definitions in section 962 underpin how the anti-avoidance and other provisions in the Chapter operate in practice. By defining 'arrangements' broadly and linking 'firm' to Part 17 of CTA 2009, the section ensures comprehensive coverage of both formal and informal agreements within partnership-related matters.

Corporation Tax Act 2010 section 962

Interpretation of Chapter

Section 962 defines key terms used throughout the Chapter, including "arrangements" and references to firms and their accounting periods.

The term "arrangements" covers any kind of agreement or understanding, whether written or unwritten.
References to a "firm" carry the same meaning as in Part 17 of CTA 2009, which deals with partnerships.
An "accounting period of a firm" means the accounting period of the company that is treated as carrying on the firm's trade.
The definition of a "connected person" is found in section 1122 of CTA 2010.

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