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HMRC internal manual

Business Leasing Manual

Sale of lessor companies and similar arrangements: anti-avoidance: manipulation of balance sheet values - main purpose test

Section 435 CTA2010

Section 435 CTA2010 cancels the effect of arrangements which prevent the sale of lessor company provisions from operating as intended. It applies to a change of ownership that happens on or after 22 November 2006. Further changes to the legislation extending the scope of the provisions were made with effect for transactions where the relevant day falls on or after 23 March 2011. See BLM82037

For transactions where the relevant day falls on or after 22 November and after 22 November 2006 the section applies:

  • whenever there is an increase or a decrease in the amount that is shown in the balance sheet of a company; and
  • that increase or decrease arises because the company has directly or indirectly entered into arrangements, see BLM82040; and
  • the main purpose, or one of the main purposes, of the arrangements is to secure a relevant tax advantage, see BLM82045.