Section 63H — Local Government Finance Act 1988: Meaning of “artificial”

Meaning of “artificial” 63H 1 For the purposes of sections 63F to 63M, an arrangement is artificial if—

a it is of a type specified by the Welsh Ministers by regulations, and b where subsection (3) applies, no determination has been made in relation to the (particular) arrangement.

2 The regulations may only specify a type of arrangement if making an arrangement of that type would not be a reasonable course of action in relation to the provisions of enactments relating to non-domestic rating, having regard in particular to—

a whether the substantive results of arrangements of that type are inconsistent with—

i any principles on which those provisions are based (whether express or implied),

and ii the policy objectives of those provisions;

b whether arrangements of that type are intended to exploit any shortcomings in those provisions;

c whether arrangements of that type lack economic or commercial substance (other than obtaining an advantage in relation to non-domestic rating).

3 The regulations may provide that a particular arrangement of a type specified under subsection (1)(a) is not artificial if a determination to that effect is made, in accordance with the regulations and having regard to all the circumstances, by—

a a billing authority in Wales, in connection with the authority’s local non-domestic rating list;

b the Welsh Ministers, in connection with a central non-domestic rating list for Wales.

4 In this section “ enactments relating to non-domestic rating ” means—

a this Act, b the Business Rate Supplements Act 2009 (c. 7) , and c any subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30) ) made under those Acts.