Section 16A — Taxation of Chargeable Gains Act 1992: Restrictions on allowable losses

Restrictions on allowable losses 16A 1 For the purposes of this Act, “ allowable loss ” does not include a loss accruing to a person if—

a it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and b the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.

2 For the purposes of subsection (1)— “ arrangements ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and “ tax advantage ” means— relief or increased relief from tax, repayment or increased repayment of tax, the avoidance or reduction of a charge to tax or an assessment to tax, or the avoidance of a possible assessment to tax, and for the purposes of this definition “ tax ” means capital gains tax, corporation tax or income tax.

3 For the purposes of subsection (1) it does not matter—

a whether the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or b whether the tax advantage is secured for the person to whom the loss accrues or for any other person.