Taxation (International and Other Provisions) Act 2010 section 461

Counteracting effect of avoidance arrangements

Section 461 is an anti-avoidance rule that allows HMRC to counteract any tax advantage obtained through arrangements designed to exploit the corporate interest restriction rules.

• Any tax advantage arising from relevant avoidance arrangements must be counteracted through just and reasonable adjustments, which can be made by assessment, amendment, disallowance of a claim, or other means.
• Arrangements are caught where one of their main purposes is to obtain a tax advantage for a company, and that advantage is attributable to manipulating how tax-interest expense amounts are brought into or left out of account under the interest restriction rules.
• The manipulation targeted includes incorrectly including or excluding interest expense amounts, inflating or deflating such amounts, or shifting them between accounting periods to gain a benefit.
• "Tax advantage" is broadly defined to cover relief from tax, repayment of tax, avoidance or reduction of tax charges, deferral of tax payments, and avoidance of obligations to deduct or account for tax — including amounts treated as corporation tax and diverted profits tax.