CFM6210 - Taxing Loan relationships: anti-avoidance: unallowable purpose: introduction and contents

Introduction

FA96/SCH9/PARA13 is an anti-avoidance provision. Anti-Avoidance Group (Investigation) is responsible for its overall policy and operation. These notes incorporate the guidance on the application of Para 13 published by the Revenue on 24 April 2002.

Para 13 disallows any debits where, in an accounting period, a loan relationship or related transaction has an unallowable purpose. It disallows the debits to the extent that, on a just and reasonable apportionment, the debits relate to the unallowable purpose. Para 13 also applies to debits and credits on exchange gains and losses where the loan relationship has an unallowable purpose (see CFM9830).

The term 'related transaction' is defined in FA96/S84- see CFM5065.

Where debits are disallowed, Para 13(1A) ensures that they cannot be brought into account under any other provisions of the Taxes Acts.

Contents