98. (1) If an arrangement is declared to be an impermissible avoidance arrange-ment, then, the consequences, in relation to tax, of the arrangement, including denial of tax benefit or a benefit under a tax treaty, shall be determined, in such manner as is deemed appropriate, in the circumstances of the case, including by way of but not limited to the following, namely:—
| (a) | disregarding, combining or recharacterising any step in, or a part or whole of, the impermissible avoidance arrangement; |
| (b) | treating the impermissible avoidance arrangement as if it had not been entered into or carried out; |
| (c) | disregarding any accommodating party or treating any accommodating party and any other party as one and the same person; |
| (d) | deeming persons who are connected persons in relation to each other to be one and the same person for the purposes of determining tax treatment of any amount; |
| (e) | reallocating amongst the parties to the arrangement— |
| (i) | any accrual, or receipt, of a capital nature or revenue nature; or |
| (ii) | any expenditure, deduction, relief or rebate; |
| (f) | treating— |
| (i) | the place of residence of any party to the arrangement; or |
| (ii) | the situs of an asset or of a transaction, |
| at a place other than the place of residence, location of the asset or location of the transaction as provided under the arrangement; or | |
| (g) | considering or looking through any arrangement by disregarding any corporate structure. |
(2) For the purposes of sub-section (1),—
| (i) | any equity may be treated as debt or vice versa; |
| (ii) | any accrual, or receipt, of a capital nature may be treated as of revenue nature or vice versa; or |
| (iii) | any expenditure, deduction, relief or rebate may be recharacterised. |
[Updated up to Finance Act 2017]
