Corporation Tax Act 2010

Cancellation of tax advantage

545Cancellation of tax advantage

(1)If an officer of Revenue and Customs thinks that a company which is, or is a member of, a UK REIT has tried to obtain a tax advantage for itself or another person, the officer may give a notice to the company specifying the tax advantage.

(2)Subsections (3) and (4) apply if a notice is given under subsection (1).

(3)The tax advantage is to be counteracted, in accordance with the notice, by an adjustment by way of—

(a)an assessment;

(b)the cancellation of a right of repayment;

(c)a requirement to return a repayment already made;

(d)the calculation or recalculation of profits or gains, or liability to tax, on a basis specified in the notice.

(4)An officer of Revenue and Customs may (in addition to the adjustment under subsection (3)) assess the company to such amount of corporation tax or income tax (as the case may be) as the officer thinks is equivalent to the value of the tax advantage.

(5)For the purposes of this section “tax advantage” has the meaning given by section 1139 (and includes, in particular, entering into arrangements the sole or main purpose of which is to avoid or reduce a charge to tax under section 538).

(6)But a company does not obtain a tax advantage merely because it is, or is a member of, a UK REIT unless the company does anything (whether before or while it is, or is a member of, the UK REIT) which in the opinion of an officer of Revenue and Customs is wholly or principally designed—

(a)to create or inflate or apply a loss, deduction or expense (whether or not made or incurred by the company), or

(b)to have another effect of a kind specified for the purposes of this subsection by regulations made by the Treasury.

546Appeal against notice under section 545

(1)A company which receives a notice under section 545(1) may appeal.

(2)An appeal must be made by notice given in writing to an officer of Revenue and Customs during the period of 30 days beginning with the date on which the notice under section 545(1) is given.

(3)On an appeal under subsection (2) that is notified to the tribunal, the tribunal may—

(a)quash the notice under section 545(1),

(b)affirm the notice, or

(c)vary the notice.