D4.741 Deductions cases—scope
The provisions in this article were repealed from 1 January 2017. From 1 January 2017, the rules dealing with hybrid and other mismatches apply; see D4.701 onwards. The latter rules were introduced as part of the OECD BEPS action plan on international corporate tax avoidance.
The deduction rules apply to companies within the charge to corporation tax for accounting periods beginning on or after 16 March 20051. This will therefore include UK resident companies and the UK permanent establishments of overseas companies.
The deductions rules apply if (and only if) all of the following conditions are satisfied in relation to a transaction to which the company is a party2:
(a) the transaction forms part of a scheme (see D4.740) which is a 'deduction scheme' (see below);
(b) the scheme is such that, for corporation tax purposes, the company is in a position to claim, or has claimed, an amount by way of deduction in respect of the transaction or is in a position to set off, or has set off, against profits in an accounting period an amount relating to the transaction;
(c) the main purpose, or one of the main purposes, of the scheme is to achieve a UK tax advantage (see D4.740) for the company;
(d) the amount of the UK tax advantage is more than a minimal amount.
If HMRC consider, on reasonable grounds, that the above conditions are or may
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