[F1196CEmployer asset-backed contributions: “acceptable structured finance arrangement” (1)U.K.
(1)For the purposes of section 196B the asset-backed arrangement is an “acceptable structured finance arrangement” if conditions M to Q are met.
(2)Condition M is that—
(a)in accordance with generally accepted accounting practice, the borrower's accounts for the period in which the advance is received record a financial liability (“the recorded financial liability”) in respect of the advance, and
(b)the asset-backed arrangement is a type 1 finance arrangement for the purposes of Chapter 5B of Part 13 of ITA 2007 or Chapter 2 of Part 16 of CTA 2010 (finance arrangements).
(3)Condition N is that—
(a)the lender is a responsible authority,
(b)the advance is money which is paid by the lender directly to the borrower wholly and directly out of E's contribution, and
(c)the advance and the recorded financial liability (as originally recorded) are both of an amount equal to the amount of E's contribution.
(4)Condition O is that, as at the time the advance is paid, the position of the lender is as follows—
(a)it is the lender (and not any person connected with the lender) who is entitled to the payments mentioned in section 196B(2)(a)(iii),
(b)those payments are to arise at times which have been fixed and fall at intervals of no more than one year (but allowing for payments otherwise due to arise on a non-working day to arise on the next working day),
(c)the lender is to receive each payment no later than 3 months after the day on which the payment arises (but allowing for payments otherwise due to be received on a non-working day to be received on the next working day),
(d)on receipt by the lender, each payment is directly to become part of the sums held for the purposes of the registered pension scheme,
(e)the payments are all to be of the same amount,
(f)the total amount of the payments is not to be less than the amount of E's contribution, and
(g)all the payments are to be received by the lender within a period (“the payment period”) ending no later than the end of the period of 25 years beginning with the day on which E's contribution is paid.
(5)For the purposes of subsection (4)(b) the first payment is to arise no later than one year after the day on which the advance is paid.
(6)For the purposes of subsection (4)(e) the following are to be ignored—
(a)negligible differences in the amounts of payments;
(b)differences in the amounts of payments which would be caused by a term of the asset-backed arrangement that requires the amounts of all outstanding payments to be increased periodically by a percentage which cannot be higher than the highest of the following—
(i)the percentage increase in the consumer prices index for the reference period, being a period determined, in relation to each periodic increase, under the term of the asset-backed arrangement in question;
(ii)the percentage increase in the retail prices index for the reference period;
(iii)the percentage for the reference period which corresponds to 5% per annum.
(7)For the purposes of subsection (4), in determining the lender's position, regard must be had (in particular) to any arrangements connected (directly or indirectly) to the asset-backed arrangement.
(8)Condition P is that, as at the time the advance is paid, in accordance with generally accepted accounting practice the recorded financial liability is to be reduced to nil by the end of the payment period by (and only by) the payments mentioned in section 196B(2)(a)(iii).
(9)Condition Q is that, as at the time the advance is paid, no commitment to which subsection (10) applies has been given.
(10)This subsection applies to a commitment (whether or not legally enforceable and whether or not subject to any conditions) if—
(a)it is given (directly or indirectly) to a relevant person,
(b)it is a commitment to secure that a person receives money or another asset, and
(c)it is linked (directly or indirectly) to the receipt by the lender of a payment mentioned in section 196B(2)(a)(iii).
(11)In subsection (10)(a) “relevant person” means—
(a)E;
(b)a person connected with E;
(c)a person acting (directly or indirectly) at the direction or request, or with the agreement, of E or a person connected with E;
(d)a person chosen (directly or indirectly) by E or a person connected with E;
(e)a person within a class of person chosen (directly or indirectly) by E or a person connected with E;
(f)a partnership;
but does not include a responsible authority.
(12)In this section “responsible authority” means—
(a)the persons who from time to time are the trustees of the registered pension scheme, or
(b)the persons who from time to time are the persons controlling the management of the registered pension scheme,
in their capacity as such.]
Textual Amendments
F1Ss. 196B-196L inserted (with effect in accordance with Sch. 13 para. 17 of the amending Act) by Finance Act 2012 (c. 14), Sch. 13 para. 15 (with Sch. 13 Pt. 4) (and see also, as to denial of relief for contributions paid during the period 29.11.2011 to 21.2.2012, the ss. 196B-196J inserted by Finance Act 2012 (c. 14), Sch. 13 paras. 1, 3 (with Sch. 13 Pt. 2))