Commentary

D1.941 Corporate capital losses anti-avoidance—schemes converting income to capital

Corporate tax
Corporate tax | Commentary

D1.941 Corporate capital losses anti-avoidance—schemes converting income to capital

Corporate tax | Commentary

D1.941 Corporate capital losses anti-avoidance—schemes converting income to capital

The following anti-avoidance provision targets schemes seeking to turn an income receipt into capital in order to make use of the relief available for capital losses. The provision applies if HMRC considers that four conditions are satisfied and issue a notice to that effect (see D1.943). The conditions are1:

  1.  

    (a)     a receipt or other amount arises to a company (X) and the receipt arises directly or indirectly in connection with any arrangements2

  2.  

    (b)     a chargeable gain accrues to X and it also incurs a capital loss, whether before or after or

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