Taxation (International and Other Provisions) Act 2010 section 45

Credit against tax on trade income: anti-avoidance rules

Section 45 contains anti-avoidance rules designed to prevent companies from exploiting the trade income credit relief rules in section 44 by diverting income to other persons through schemes or arrangements.

• Where a company (A) enters into a scheme with another person (B) with a main purpose of altering how the trade income credit rules apply to A, the income from that scheme is treated as B's trade income, not A's, for the purposes of calculating credit relief.
• Where a person (D) receives income under a scheme with a connected person (C), and that income would reasonably have been C's trade income had C received it, and a main purpose of the scheme is to avoid the trade income credit rules applying, the income is treated as D's trade income for credit relief purposes.
• When testing whether the income would have been C's trade income, you assume that C stood in the place of D (or any other connected person party to the scheme) in any of the transactions giving rise to that income.
• "Connected person" has the meaning given by section 1122 of the Corporation Tax Act 2010, and "trade income" has the same meaning as in section 44.