Finance Act 2007

Loan relationships and collective investment schemes

16 (1) Paragraph 4 of Schedule 10 to FA 1996 (company holdings in unit trusts and offshore funds) is amended as follows.

(2) In sub-paragraph (2) (relevant holding treated as rights under creditor relationship), for “and (4)” substitute “to (5)”.

(3) After sub-paragraph (4) insert—

“(5) In determining the debits and credits under sub-paragraph (3) there shall be left out of account amounts relating to any investment or liability of the scheme or fund where—

(a) the investment was made, or the liability was incurred, with the relevant avoidance intention, or

(b) any transaction (or series of transactions) was entered into in relation to the investment or liability with that intention.

(6) The relevant avoidance intention is the intention of—

(a) eliminating or reducing the credits to be brought into account for the purposes of this Chapter as respects the company’s relevant holdings, or

(b) creating or increasing the debits to be so brought into account.”

(4) In the case of amounts relating to investments, the amendments made by this paragraph have effect in relation to accounting periods ending on or after 6th March 2007.

(5) But in that case, in relation to accounting periods beginning before that date, amounts are to be left out of account as a result of those amendments only if they relate to any time on or after that date.

(6) In the case of amounts relating to liabilities, those amendments have effect in relation to accounting periods ending on or after 9th May 2007.

(7) But in that case, in relation to accounting periods beginning before that date, amounts are to be left out of account as a result of those amendments only if they relate to any time on or after that date.