Section 103K — Taxation of Chargeable Gains Act 1992: Restriction on application of sections 103G, 103H and 103I : anti-avoidance

Restriction on application of sections 103G, 103H and 103I : anti-avoidance 103K 1 This section applies in respect of arrangements relating to an exchange or scheme of reconstruction as regards which section 103G, 103H or 103I applies if the main purpose, or one of the main purposes, of the arrangements is to reduce or avoid liability to capital gains tax, corporation tax or income tax. 1A Any such reduction or avoidance that would (in the absence of this section) arise from such arrangements is to be counteracted by the making of such adjustments as are just and reasonable (in light of the reduction or avoidance). 1B This includes, in an appropriate case, disapplying section 103G, 103H or 103I insofar as is required to counteract the reduction or avoidance. 1C Any adjustments required to be made under this section (whether or not by an officer of Revenue and Customs) may be made by way of—

a an assessment, or b the modification of an assessment. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 If any tax assessed on a participant (“the chargeable participant”) by virtue of this section is not paid within 6 months from the date determined under subsection (5) below, any other participant who—

a holds all or any part of the units that were issued to the chargeable participant as part of the exchange or scheme of reconstruction , and b has acquired them without there having been, since their acquisition by the chargeable participant, any disposal of them not falling within section 58(1) or 171, may, at any time within 2 years from that date, be assessed and charged (in the name of the chargeable participant) to all or, as the case may be, a corresponding part of the unpaid tax; and a participant paying any amount of tax under this subsection shall be entitled to recover from the chargeable participant a sum equal to that amount together with any interest paid by him under section 87A of the Management Act on that amount.

5 The date referred to in subsection (4) above is whichever is the later of—

a the date when the tax becomes due and payable by the chargeable participant;

and b the date when the assessment was made on the chargeable participant.

6 Section 138 (procedure for clearance in advance) applies to this section as it applies to section 137 (with any necessary modifications).

7 In this section, “ arrangements ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).