Sch 4 para 1
(1) This Schedule contains provision about countering the tax effects of certain arrangements (“profit fragmentation arrangements”). (2) Profit fragmentation arrangements involve the following parties— (a) a person resident in the United Kingdom (“the resident party”), (b) an overseas person or entity (“the overseas party”) who is not resident in the United Kingdom, and (c) an individual (a “related individual”) who is— (i) the resident party, (ii) a member of a partnership of which the resident party is a partner, or (iii) a participator in a company which is the resident party. (3) An “ overseas person or entity ” means— (a) a person abroad within the meaning given by section 718 of ITA 2007, or (b) a company, partnership, trust or other entity or arrangements established or having effect under the law of a country or territory outside the United Kingdom (regardless of whether it has legal personality as a body corporate). (4) Paragraphs 2 to 6 deal with the definition of profit fragmentation arrangements. (5) Paragraph 7 deals with the adjustments which must be made to counteract the effects of such arrangements. (6) Other provisions of this Schedule— (a) deal with double taxation and the tax treatment of reimbursement payments (paragraphs 8 and 9), and (b) deal with interpretation and commencement (paragraphs 10 to 12).