Taxes Consolidation Act 1997 section 267V

Transactions to avoid tax

Section 267V is an anti-avoidance provision that prevents the Islamic finance rules from being used to avoid tax.

• The Islamic finance rules only apply to transactions carried out for genuine commercial reasons.
• Transactions forming part of a scheme or arrangement aimed at tax avoidance are excluded.
• The exclusion covers all major taxes: income tax, corporation tax, capital gains tax, VAT, stamp duty, and capital acquisitions tax.
• Both the main purpose and one of the main purposes tests apply when determining avoidance.