Income Tax (Trading and Other Income) Act 2005 (c. 5)

Part 8 U.K. Foreign income: special rules

Chapter 2 U.K. Relevant foreign income charged on remittance basis

Remittance basis U.K.

834 Arrangements treated as repayment of UK-linked debts U.K.

(1) A person to whom money has been lent (“the borrower”) is treated for the purposes of section 833 as using relevant foreign income to satisfy a debt if conditions A and B are met.

(2) Condition A is that the borrower uses the income in such a way that the lender holds money or property representing the income on behalf or on account of the borrower in such circumstances that it is available to the lender to satisfy the debt (by set-off or otherwise).

(3) Condition B is that under an arrangement between the borrower and the lender—

(a) the amount for the time being owed by the borrower to the lender, or

(b) the time at which the debt is to be satisfied,

depends in any respect, directly or indirectly, on the amount or value the lender holds on behalf or on account of the borrower as mentioned in subsection (2).

(4) In this section “lender”, in relation to money lent, includes any person for the time being entitled to repayment.

Modifications etc. (not altering text)

C1 S. 834 applied (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 735(6), 1034 (with transitional provisions and savings in Sch. 2)