CTM07915 - Corporation tax: targeted anti-avoidance rule: commencement

F(No2)A17/S19

In most cases, the TAAR has effect from 1 April 2017. This means that it can counter tax advantages that arise on or after that date.

It does not matter when the arrangements were made. The TAAR can apply to arrangements entered into before the commencement date if the purpose or one of the main purposes is to ensure that a tax advantage will arise and as, a matter of fact, the advantage does arise after that date.

Where the tax advantage would result from a deduction or increased deduction under one of several provisions, there is a different commencement date of 12 July 2017. The provisions for which this different commencement date applies are:

• CTA09/S463H (non-trading deficits from loan relationships: where an investment business becomes small or negligible)
• CTA10/S62(3) (losses of a UK property business),
• CTA10/S303B, 303C and 303D (non-decommissioning losses of oil and gas ring-fence trades),
• FA12/S124A, S124C (excess carried-forward BLAGAB trade losses).

Straddling periods

F(No2)A17/S19(11) provides for a situation where the tax advantage in question relates to a period that begins before and ends after the commencement date.

The legislation divides the accounting period into two parts, treated as two separate periods:

• The part of the accounting period that falls before the commencement date, and
• The part that falls on or after the commencement date.

This allows amounts to be apportioned between the two periods. The TAAR has effect only for amounts apportioned to the second period.

Apportionments should be made on a time basis according to the respective lengths of the periods (CTA10/S1172) unless this produces an unjust or unreasonable result. In that case, another method should be used to apportion amounts on a just and reasonable basis.