Part 3 U.K.Income tax, corporation tax and capital gains tax

Chapter 6U.K.Exemption from income tax for certain interest and royalty payments

Special relationships and anti-avoidanceU.K.

104Anti-avoidanceU.K.

(1)Section 98 does not apply in relation to a payment of interest or of a royalty if—

(a)in the case of a payment of interest, Condition A is satisfied, or

(b)in the case of a payment of a royalty, Condition B is satisfied.

(2)Condition A is satisfied if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to take advantage of this Chapter by means of that creation or assignment.

(3)Condition B is satisfied if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the right in respect of which the royalty is paid to take advantage of this Chapter by means of that creation or assignment.