Modifications etc. (not altering text)
C1Sch. 28AA modified (28.7.2000) by Finance Act 2000 (c. 17), Sch. 22 para. 58(1) (as amended by 2004 c. 12, s. 37, Sch. 5 para. 12) (with Sch. 22 para. 58(3))
C2Sch. 28AA applied (with modifications) (28.7.2000) by Finance Act 2000 (c. 17), Sch. 22 para. 59(1)(2) (as amended by 2004 c. 12, s. 37, Sch. 5 para. 13) (with Sch. 22 para. 59(4))
C3Sch. 28AA applied by Finance Act 1996 (c. 8), s. 100 (as substituted (with effect in accordance with s. 79(3) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 23 para. 6 (with s. 81(4)(5), Sch. 23 para. 25))
C4Sch. 28AA modified by Finance Act 1996 (c. 8), Sch. 9 para. 11A(1) (as inserted (with effect in accordance with s. 79(3) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 23 para. 11 (with s. 81(4)(5), Sch. 23 para. 25))
Valid from 22/07/2004
1B(1)This paragraph applies where the actual provision is made or imposed by means of a series of transactions which include—
(a)the issuing of a security by a company which is one of the affected persons (“the issuing company”), and
(b)the provision of a guarantee by a company which is the other of those persons.
(2)Paragraph 1(2)(a) above shall be construed as requiring account to be taken of all factors, including—
(a)the question whether the guarantee would have been provided at all in the absence of the special relationship,
(b)the amount that would have been guaranteed in the absence of the special relationship, and
(c)the consideration for the guarantee and other terms which would have been agreed in the absence of the special relationship,
but this is subject to the following provisions of this paragraph.
(3)In a case where—
(a)a company provides a guarantee in respect of another company with which it has a special relationship, and
(b)it is not part of the first company’s business to provide guarantees generally,
the fact that it is not part of the first company’s business to provide guarantees generally shall be disregarded in construing sub-paragraph (2) above.
(4)Paragraph 1(2)(a) above shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in sub-paragraph (5) below, of (or of any inference capable of being drawn from) any guarantee provided by a company with which the issuing company has a participatory relationship.
(5)The matters are—
(a)the appropriate level or extent of the issuing company’s overall indebtedness;
(b)whether it might be expected that the issuing company and a particular person would have become parties to a transaction involving the issue of a security by the issuing company or the making of a loan, or a loan of a particular amount, to the issuing company;
(c)the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
(6)The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
(a)sub-paragraph (6) (meaning of special relationship);
(b)sub-paragraph (7) (construction of references to a guarantee);
(c)sub-paragraph (8) (meaning of participatory relationship);
(d)sub-paragraph (9) (meaning of security);
(e)sub-paragraph (10) (extended meaning of security).