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ICTA88/S444BA (7) and (8) are anti-avoidance provisions which apply where arrangements have been made or transactions entered into solely or mainly to obtain a tax benefit. GIM7350 gives more details and an example of the type of ‘arrangements� to which it might apply.

Although, in the context of equivalent Lloyd’s reserves, the reserves are constructed with a view to calculating the tax relief, this will not trigger the anti-avoidance provisions where the calculations follow straightforwardly from the business written. Merely establishing a record for tax relief calculation purposes will not to amount to ‘arrangements� of the type contemplated, in circumstances where availability of the relief is clearly the purpose of FA09/S47 and SI2009/2039 - see the comments of Lord Nolan in IRC v Willoughby 70TC57 at 116-117.