GA 1 Commissioner’s power to adjust
When this section applies

(1)

This section applies if an arrangement is void under section BG 1 (Tax avoidance).

Commissioner’s general power

(2)

The Commissioner may adjust the taxable income of a person affected by the arrangement in a way the Commissioner thinks appropriate, in order to counteract a tax advantage obtained by the person from or under the arrangement.

Commissioner’s specific power over tax credits

(3)

The Commissioner may—

(a)

disallow some or all of a tax credit of a person affected by the arrangement; or

(b)

allow another person to benefit from some or all of the tax credit.

Commissioner’s identification of hypothetical situation

(4)

When applying subsections (2) and (3), the Commissioner may have regard to 1 or more of the amounts listed in subsection (5) which, in the Commissioner’s opinion, had the arrangement not occurred, the person—

(a)

would have had; or

(b)

would in all likelihood have had; or

(c)

might be expected to have had.

Reconstructed amounts

(5)

The amounts referred to in subsection (4) are—

(a)

an amount of income of the person:

(b)

an amount of deduction of the person:

(c)

an amount of tax loss of the person:

(d)

an amount of tax credit of the person.

No double counting

(6)

When applying subsection (2), if the Commissioner includes an amount of income or deduction in calculating the taxable income of the person, it must not be included in calculating the taxable income of another person.

Meaning of tax credit

(7)

In this section, tax credit means a reduction in the tax a person must pay because of—

(a)

a credit allowed for a payment by the person of an amount of tax or of another item; or

(b)

another type of benefit.

Defined in this Act: amount, arrangement, Commissioner, deduction, tax, tax credit, tax loss, taxable income

Compare: 2004 No 35 s GB 1(1)–(2C)