Finance (No. 2) Act 2017

21(1)This paragraph applies where—U.K.

(a)a proposal for arrangements is implemented more than once, by a number of tax arrangements which are substantially the same as each other (“related arrangements”),

(b)paragraph 1 applies in relation to particular arrangements (“the arrangements concerned”) which are one of the number of related arrangements implementing the proposal, and

(c)at the time when the person who entered into the arrangements concerned incurs a defeat in respect of them [F1(other than a tribunal or court defeat), neither condition 1 nor condition 2 has been met].

(2)HMRC may not assess any penalty payable under paragraph 1 in respect of the arrangements concerned until [F2condition 1 or condition 2 is met].

[F3(2A)Condition 1 is that a defeat that is a tribunal or court defeat is incurred in the case of at least one of the number of related arrangements implementing the proposal.

(2B)Condition 2 is that the required number or percentage of relevant defeats is reached.

(2C)For the purposes of this paragraph, a defeat incurred in respect of arrangements is a “tribunal or court defeat” if—

(a)condition A (in paragraph 5) is met and the adjustments mentioned in paragraph 5(2) have been confirmed by a tribunal or court, or

(b)condition B (in paragraph 6) is met and the assessment mentioned in paragraph 6(2) has been confirmed by a tribunal or court.

(2D)An adjustment or assessment (as the case may be) has been confirmed by a tribunal or court if the First-tier Tribunal, the Upper Tribunal or a court has determined in proceedings before it that the adjustment or assessment in question should not be varied.

(2E)For the purposes of sub-paragraph (2D), disregard variations that do not substantively alter the basis of the adjustment or assessment in question.]

(3)For the purposes of this paragraph the “required [F4number or] percentage of relevant defeats” is reached when HMRC reasonably believe that [F5—

(a)the number of related arrangements implementing the proposal is fewer than 21 and defeats have been incurred in the case of 50% or more of those arrangements;

(b)the number of related arrangements implementing the proposal is more than 20 but fewer than 44 and defeats have been incurred in the case of 11 or more of those arrangements;

(c)the number of related arrangements implementing the proposal is more than 43 but fewer than 200 and defeats have been incurred in the case of 25% or more of those arrangements;

(d)the number of related arrangements implementing the proposal is 200 or more and defeats have been incurred in the case of 50 or more of those arrangements.]

(4)Sub-paragraph (2) does not apply in relation to a penalty if the person liable to the penalty requests assessment of the penalty sooner than the time allowed by sub-paragraph (2).