Taxation of Chargeable Gains Act 1992 section 151D

Corporate strips: manipulation of price: associated payment giving rise to loss

Section 151D prevents losses arising from payments made under schemes or arrangements involving corporate strips from being treated as allowable capital losses, where those schemes have an unallowable purpose of obtaining a tax advantage.

• Where a scheme or arrangement involving corporate strips has an unallowable purpose and a payment is made outside the normal acquisition or disposal of a corporate strip, any resulting loss is denied as an allowable loss.
• A scheme or arrangement has an unallowable purpose if the main benefit, or one of the main benefits, is to obtain a tax advantage for any person or to create an allowable loss for any person.
• The meanings of "corporate strip" and "disposal" are taken from the deeply discounted securities rules in Chapter 8 of Part 4 of ITTOIA 2005, and "tax advantage" is defined by section 1139 of the Corporation Tax Act 2010.
• This anti-avoidance provision applies to losses accruing on or after 6th April 2005.