Finance Act 2010

Transitional provision

4 (1) The amendments made by this Schedule do not have effect in relation to a relevant acquisition that is made on or after 14 October 2009, or to a release of rights acquired by way of such an acquisition, if—

(a) the acquisition is made pursuant to an agreement entered into before 14 October 2009, or

(b) the acquisition is made during the transitional period and condition A, B or C is met.

(2) Condition A is that, before 14 October 2009—

(a) the original creditor received a proposal from the new creditor that the acquisition should be made, or

(b) the new creditor received a proposal from the original creditor that the acquisition should be made.

(3) Condition B is that—

(a) the acquisition is of rights under a loan relationship that is represented by a security,

(b) during the transitional period the new creditor acquires rights under other loan relationships represented by securities, and

(c) before 14 October 2009, either—

(i) persons together holding more than 50% by value of the securities referred to in paragraphs (a) and (b) (“the bought-back securities”) received proposals from the new creditor that the acquisitions should be made, or

(ii) the new creditor received proposals from persons together holding more than 50% by value of the bought-back securities that the acquisitions should be made.

(4) In sub-paragraphs (2) and (3)—

(a) a reference to the original creditor includes any person acting on behalf of, or who controls, the original creditor,

(b) a reference to the new creditor includes any person acting on behalf of, or who controls, the new creditor, and

(c) a reference to a person holding a security includes any person acting on behalf of, or who controls, the person holding the security.

(5) Condition C is that—

(a) before 14 October 2009, the Financial Services Authority gave its agreement (“the FSA agreement”) to the acquisition being made (and had not withdrawn that agreement),

(b) if the FSA agreement was given subject to the agreement of any other person, the agreement of that other person was also given (and not withdrawn) before that date, and

(c) condition A or B would have been met but for the compliance by the original creditor or the new creditor with any other term on which the FSA agreement was given.

(6) In this paragraph—

(a) “the original creditor”, in relation to a relevant acquisition, means the person from whom the rights are acquired, and

(b) “the new creditor”, in relation to a relevant acquisition, means the person who acquires the rights.

(7) In this paragraph “the transitional period” means the period—

(a) beginning with 14 October 2009, and

(b) ending with 31 January 2010.

(8) Section 472 of CTA 2009 (meaning of “control”) applies for the purposes of this paragraph.