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HMRC internal manual

Corporate Finance Manual

Loan relationships: tax avoidance: unallowable purpose: sources of advice

Referrals and guidance

Taxpayers may ask whether CTA09/SS441-442 will apply to a future transaction, or to borrowing for certain purposes. HMRC officers should not give advice but simply refer them to the Economic Secretary’s comments at report stage (CFM38170), particularly the penultimate paragraph. Her comments embody the extent of the guidance HMRC can give.

In view of the Economic Secretary’s comments, the application of SS441-442 is a matter of careful judgement. Where HMRC officers consider that the unallowable purposes rules may apply to a transaction which has taken place, they are advised to submit the case to Anti- Avoidance Group before taking any action.