Section 517K — Income Tax Act 2007: Arrangements for avoiding tax

Arrangements for avoiding tax 517K 1 Subsection (3) applies if an arrangement has been entered into the main purpose or one of the main purposes of which is to enable a person to obtain a relevant tax advantage.

2 In subsection (1) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (3) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).

3 The tax advantage is to be counteracted by means of adjustments.

4 For this purpose adjustments may be made (whether by an officer of Revenue and Customs or by the person) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.

5 In this section “ relevant tax advantage ” means an advantage in relation to income tax charged (or which would, if the tax advantage were not obtained, be charged) in respect of amounts treated as profits of a trade by virtue of this Part.

6 In this section “ advantage ” includes—

a a relief or increased relief from tax, b repayment or increased repayment of tax, c avoidance or reduction of a charge to tax or an assessment to tax, d avoidance of a possible assessment to tax, e deferral of a payment of tax or advancement of a repayment of tax, and f avoidance of an obligation to deduct or account for tax.