Transactions designed to avoid liability to tax.
(1)
Where the Commissioner is of the opinion that the main purpose
or one of the main purposes for which a transaction was effected (whether before
or after the passing of this Act) was the avoidance or reduction of liability to tax
for a year of income or that the main benefit which might have been expected to
accrue from the transaction in the three years immediately following the
completion thereof was the avoidance or reduction of liability to tax, he may, if
he determines it to be just and reasonable, direct that such adjustments shall be
made as respects liability to tax as he considers appropriate to counteract the
avoidance or reduction of liability to tax which could otherwise be effected by
the transaction.
(2)
Without prejudice to the generality of the powers
conferred by subsection (1), those powers shall extend -
- (a) to the charging to tax of persons who, but for the adjustments, would not be charged to the same extent;
- (b) to the charging of a greater amount of tax than would be charged but for the adjustments.
(3)
A direction of the Commissioner under this section shall
specify the transaction or transactions giving rise to the direction and the
adjustments as respects liability to tax which the Commissioner considers
appropriate.