Section 546A Restrictions on allowable losses

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Amendments

Section 546A inserted by Finance Act 2010 section 59 for disposals made on or after 4 February 2010.

(1) In this section—

"arrangements" includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

"tax advantage" means—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) the avoidance of a possible assessment to tax;

"tax" means capital gains tax or corporation tax on chargeable gains.

What is meant by a "tax advantage"?

(1) A tax advantage means:...

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(2) For the purposes of the Capital Gains Tax Acts, a loss shall not be an allowable loss if—

(a) it accrues to the person directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and

(b) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage.

When is a capital loss not an allowable loss?

(2) A capital loss is not allowable if it results from arrangements (i.e. any agreement, scheme, understanding or transaction), the purpose of which is to secure a tax advantage (see (1)).

(3) For the purposes of subsection (2), it shall not be relevant—

(a) whether or not the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or

(b) whether or not the tax advantage is secured for the person to whom the loss accrues or for any other person.

What additional considerations apply in determining when a capital loss is not an allowable loss?

(3) In determining whether a capital loss results from arrangements intended to secure a tax advantage, it is not relevant whether:...

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