E1.1441 TiS (corporation tax)—meaning of tax advantage

These provisions apply for corporation tax purposes. For details of the income tax regime see E1.1417–E1.1419.

A tax advantage means¹:

1.  

   •     a relief or increased relief from tax (this includes, for income tax purposes, a tax credit (prior to the repeal of tax credits from April 2016²))

2.  

   •     a repayment or increased repayment of tax

3.  

   •     the avoidance or reduction of a charge to tax or the avoidance of an assessment or a possible assessment to tax. It does not matter whether the avoidance or reduction is effected by receipts accruing in such a way that the recipient does not pay or bear income tax on them or obtains a deduction in calculating profits or gains

One ingredient frequently seen in these cases is that the transaction that was carried out is much more complex than the alternative higher-tax transaction that HMRC might be suggesting is the proper comparator. So, for example, in Cleary³, discussed below, a sale of shares from