Valid from 19/03/1997
91 Disposals of loan relationships with or without interest.U.K.
(1)Section 807A of the Taxes Act 1988 (disposals and acquisitions of company loan relationships with or without interest) shall be amended as follows.
(2)At the beginning of subsection (2) there shall be inserted “ Subject to subsection (2A) below, ”.
(3)After that subsection there shall be inserted the following subsection—
“(2A)Tax attributable to interest accruing to a company under a loan relationship does not fall within subsection (2) above if—
(a)at the time when the interest accrues, that company has ceased to be a party to that relationship by reason of having made the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship; and
(b)that time falls during the period for which those arrangements have effect.”
(4)In subsection (3)(b), after “related transaction” there shall be inserted “ other than the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship ”.
(5)After subsection (6) there shall be inserted the following subsection—
“(6A)In this section “repo or stock-lending arrangements” has the same meaning as in paragraph 15 of Schedule 9 to the M1Finance Act 1996 (repo transactions and stock-lending); and, in relation to any such arrangements—
(a)a reference to the initial transfer is a reference to the transfer mentioned in sub-paragraph (3)(a) of that paragraph; and
(b)a reference to the period for which the arrangements have effect is a reference to the period from the making of the initial transfer until whichever is the earlier of the following—
(i)the discharge of the obligations arising by virtue of the entitlement or requirement mentioned in sub-paragraph (3)(b) of that paragraph; and
(ii)the time when it becomes apparent that the discharge mentioned in sub-paragraph (i) above will not take place.”
(6)Subsections (2) and (3) above have effect in relation to interest accruing on or after 1st April 1996.
(7)Subsection (4) above has effect in relation to transactions made on or after 26th November 1996.