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An anti-avoidance provision applies for transactions entered into on or after 18 November 2015¹ to counteract the effect of avoidance arrangements. This provision applies to counter any loan-related tax advantages that would, in the absence of the provision, arise from relevant avoidance arrangements. Where the provision applies the arrangements are counteracted by the making of such adjustments as are just and reasonable in relation to the debits and credits that would otherwise be brought into account for the purposes of the loan relationships legislation. Such adjustments may be made (whether or not by HMRC) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim or otherwise².

A company will obtain a loan-related tax advantage if³:

1. Ìý

   •ÌýÌýÌýÌý it brings a debit to which it would not otherwise be entitled into account in computing its profits for the purposes of the loan relationships legislation

2. Ìý

   •ÌýÌýÌýÌý it brings a debit into account in computing its profits for the purposes of the loan