Taxation (International and Other Provisions) Act 2010 section 371SO

Tax advantages

Section 371SO ensures that anti-avoidance rules in the Corporation Tax Acts which target arrangements designed to obtain a tax advantage also catch arrangements whose purpose is to avoid or reduce a controlled foreign company (CFC) charge.

• Where an arrangement or conduct aims to avoid or reduce a CFC charge, this is treated as seeking a tax advantage for the purposes of anti-avoidance provisions in the Corporation Tax Acts.
• The section applies when the purpose of avoiding a CFC charge is achieved by means that would, under the CFC assumptions, constitute a conventional tax advantage (such as a relief, deduction, repayment, or avoidance of a tax charge).
• The Corporation Tax Acts are deemed to apply to such arrangements in the same way as if the purpose were to obtain an actual conventional tax advantage, rather than merely to avoid a CFC charge.
• The effect is to link the avoidance or reduction of a CFC charge to the established definition of "tax advantage," ensuring anti-avoidance rules operate properly when computing a CFC's assumed taxable total profits.