Income Tax Act 2007 section 684

Person liable to counteraction of income tax advantage

Section 684 identifies the person who is liable to have an income tax advantage counteracted where transactions in securities have been carried out with obtaining that advantage as a main purpose.

• A person ("the party") falls within this section if they are a party to one or more transactions in securities, the circumstances are covered by section 685 and not excluded by section 686, and a main purpose of the transaction(s) is to obtain an income tax advantage
• A "transaction in securities" is broadly defined to include buying, selling or exchanging securities, issuing new securities, applying or subscribing for new securities, altering rights attached to securities, repaying share capital or share premium, and making distributions in a winding up
• The section applies where the party or any other person obtains an income tax advantage as a consequence of the transaction or the combined effect of the transactions
• The section is subject to no-counteraction notices issued under section 698A, which can disapply these provisions where HMRC is satisfied the transactions are not tax-motivated