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HMRC internal manual

Capital Gains Manual

Administration: losses: targeted rules to prevent the contrived creation of capital losses - definition of tax advantage

“Tax advantage” has the meaning given in section 184D of the legislation.There are four legs to this definition, which cover relief, repayments, the amount of acharge, and the assessment of corporation tax.

If a tax advantage arises out of a transaction that is part of the arrangements, thelegislation asks whether the main purpose or one of the main purposes of the arrangements(referred to as “a main purpose” in this guidance) is to achieve a taxadvantage. The purpose of the arrangements is determined by the purpose of theparticipants in entering into the arrangements. If any participant has a main purpose ofachieving a tax advantage, that will constitute a main purpose of the arrangements.