3(1)Section 774B of ICTA (disregard of intended effects of arrangement involving disposals of assets) is amended as follows.U.K.
(2)For subsection (1) substitute—
“(1)This section applies if an arrangement is a structured finance arrangement in relation to a person (“the borrower”).
(1A)If the arrangement would (disregarding this section) have had the relevant effect (see subsections (2) and (3)), the arrangement is not to have that effect.
(1B)If the arrangement would (disregarding this section) not have had that effect, the payments mentioned in section 774A(2)(d) are to be treated for tax purposes as income of the borrower payable in respect of the security (whether or not those payments are also the income of anyone else for tax purposes).”
(3)In subsection (4)(a) (income tax relief for finance charge in respect of advance), for the words from the beginning to “is a person” substitute “ a person in relation to whom this section applies is ”.
(4)In subsection (5) (corporation tax relief for finance charge in respect of advance), for the words from the beginning to “is a company” substitute “ If a person in relation to whom this section applies is ”.