546A Restrictions on allowable losses

Summary

This section disallows capital losses if they arise from arrangements whose main purpose or one of whose main purposes is to secure a tax advantage.

Details

The following definitions apply in this section:

(1) “arrangements” includes any agreement, understanding, scheme, transaction or series of

transactions (whether or not they are legally enforceable);

“tax advantage” means —

• relief or increased relief from tax,
• repayment or increased repayment of tax,
• the avoidance or reduction of a charge to tax or an assessment to tax, or
• the avoidance of a possible assessment to tax;

“tax” means capital gains tax or corporation tax on chargeable gains;

(2) A loss will not be an allowable loss for capital gains tax purposes if —

1. (a) it accrues to a person directly or indirectly in consequence of any arrangements, and
2. (b) the main purpose or one of the main purposes of the arrangements is to secure a tax advantage.

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

• whether or not the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
• whether or not the tax advantage is secured for the person to whom the loss accrues or for any other person.

Relevant Date: Finance Act 2021