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HMRC internal manual

International Manual

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HM Revenue & Customs
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Arbitrage: legislation and principles - receipts: aim and effect of the legislation

This part of the legislation s249 to 254 TIOPA 2010 applies more narrowly than the deductions rules. It applies to receipts that are part of a scheme through which a UK resident company seeks to benefit from avoidance through tax arbitrage.

The effect of the legislation

Where all the conditions are satisfied, HM Revenue and Customs will issue a notice directing that the legislation applies. The amount receivable by the company will consequently be treated as income chargeable to tax under Case VI of Schedule D. The legislation will not apply however if the receipt has already been taken into account for the purpose of calculating a credit for another company under FA96/S91A or FA96/S91B (shares treated as loan relationships).