If management expenses or other tax advantage arise out of a transaction that is part of arrangements, the legislation asks whether the main purpose or one of the main purposes of the arrangements (referred to as ‘a main purpose’ in this guidance) is to create or increase the deduction for management expenses or to achieve another tax advantage.

The purpose of the arrangements is determined by the purpose of the participants in entering into the arrangements. If any participant has a main purpose of achieving a deduction (or increased deduction) for management expenses or other tax advantage, that will constitute a main purpose of the arrangements.

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