Finance Act 2007

Ignoring effect on lender of sale of securities: creditor repos and creditor quasi-repos U.K.

9 (1) This paragraph applies if a company (“the lender”) has a creditor repo or a creditor quasi-repo. U.K.

(2) For the purposes of the charge to corporation tax in respect of income of the lender arising while the arrangement is in force, the Corporation Tax Acts have effect as if—

(a) the lender did not hold the securities that are initially sold for any period for which the arrangement is in force, and

(b) the lender did not make in that period any payment representative of income payable in respect of those securities.

(3) But—

(a) an amount is not to be ignored for the purposes of that charge as a result of sub-paragraph (2)(a) if it is, in accordance with generally accepted accounting practice, recognised in determining the lender's profit or loss for that or any other period or taken into account in calculating the amounts which are so recognised, and

(b) a payment is not to be ignored for those purposes as a result of sub-paragraph (2)(b) if the payment is, in accordance with that practice, so recognised.

(4) Nothing in sub-paragraph (3)(b) affects the question whether (apart from that provision) the payment (or any part of it) may be deducted in calculating any income for corporation tax purposes or against total profits.

Commencement Information

I1 Sch. 13 para. 9 in force at 1.10.2007 with effect in relation to an arrangement that comes into force on or after 1.10.2007 by S.I. 2007/2483, art. 2