(1)Section 248 (the rule against deduction for untaxable payments) applies if conditions A, B and C are met.
(2)Condition A is that a transaction that forms part of the deduction scheme, or a series of transactions that forms part of the scheme, makes or imposes provision as a result of which—
(a)one person (“the payer”) makes a payment, and
(b)another person (“the payee”) receives, or becomes entitled to receive, a payment or payments.
(3)Condition B is that, in respect of the payment by the payer, an amount may be deducted by, or otherwise allowed to—
(a)the payer, or
(b)another person who is party to, or concerned in, the scheme,
in calculating any profits or losses for tax purposes.
(4)Condition C is that as a result of provision made or imposed by the deduction scheme—
(a)the payee is not liable to tax—
(i)in respect of the payment or payments that the payee receives or is entitled to receive as a result of the transaction or series of transactions, or
(ii)in respect of part of such payment or payments, or
(b)if the payee is so liable, the payee’s liability to tax is reduced.
(5)In this section—
(a)“the deduction scheme” means the scheme in relation to which the deduction scheme conditions are met, and
(b)“tax purposes” includes the purposes of any non-UK tax (within the meaning of section 187 of CTA 2010).
(6)Sections 246 and 247 make further provision about condition C.
(7)Expressions used in those sections or section 248 have the same meaning as in this section.