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HMRC internal manual

International Manual

Arbitrage: legislation and principles - deduction: persons affected by the deduction rules

The anti-arbitrage rules apply to disallow a UK corporation tax deduction where -

  • there is a scheme which meets the conditions in s233 Taxation (International and Other Provisions) Act 2010 (TIOPA 2010) and
  • where there is a payment which qualifies for a tax deduction and
  • there exists a corresponding payee who is not taxed on the receipt, or the tax charge is reduced, or where there arises another tax deduction for the same item of expenditure.

The deduction rules apply to companies within the charge to corporation tax. This includes UK resident companies and the UK permanent establishments of overseas companies. (s232(1) TIOPA 2010).