Section 554Z8 — Income Tax (Earnings and Pensions) Act 2003: Cases where consideration given for relevant step

Cases where consideration given for relevant step 554Z8 1 Subsection (2) applies if—

a the relevant step is a step within section 554C(1)(a) to (c),

b the relevant step is for consideration given by A in the form of the transfer of an asset to P from A, c the transfer by A of the asset is made before, or at or about, the time the relevant step is taken and is not by way of a loan, and d there is no connection (direct or indirect) between the transfer by A of the asset and a tax avoidance arrangement.

2 The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

a the market value of the asset transferred by A at the time of its transfer, or b if the value of the relevant step was reduced under section 554Z4, X% of that market value.

3 For the purposes of subsection (1)(d) it is (in particular) to be assumed that the transfer by A of the asset is connected with a tax avoidance arrangement if—

a before the transfer, the asset was transferred to A by another person by way of a loan, or b the asset is, or carries with it, any rights or interests under the relevant arrangement or any arrangement which is connected (directly or indirectly) with the relevant arrangement.

4 In subsection (3)(b) “ the relevant arrangement ” has the meaning given by section 554A(1)(b).

5 Subsection (6) applies if—

a the relevant step is a step within section 554C(1)(b) or (c) or (e) or 554D and does not also involve a sum of money, b the relevant step is for consideration given by A in the form of the payment of a sum of money to P by A, ... c the payment is made before, or at or about, the time the relevant step is taken , and d there is no connection (direct or indirect) between the payment and a tax avoidance arrangement.

6 The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

a the amount of the consideration given, or b if the value of the relevant step was reduced under section 554Z4, X% of the amount of that consideration.

7 In subsections (2)(b) and (6)(b) “ X% ” means the proportion of the value of the relevant step (as determined under section 554Z3) left after the reduction under section 554Z4.

8 In this section references to A include references to any person linked with A.