Part 11Manufactured payments and repos
Chapter 5Price differences under repos
Additional tax treatment
609Additional income tax consequences of price differences
(1)
Subsections (2) and (3) apply if an amount is treated under section 607 as a payment of interest.
(2)
If the repurchase price is more than the sale price, the repurchase price is treated for other income tax purposes as reduced by the amount of the payment of interest.
(3)
If the sale price is more than the repurchase price, the repurchase price is treated for other income tax purposes as increased by the amount of the payment of interest.
(4)
“Other income tax purposes” means income tax purposes other than the purposes of—
(a)
sections 601 to 605 (deemed manufactured payments: repos), and
(b)
this Chapter.
(5)
The Treasury may by regulations provide for any amount which is treated under section 607 as received as a payment of interest to be treated, in such circumstances and so far as may be described in the regulations, as exempt pension income.
(6)
“Exempt pension income” means income which is eligible for relief from income tax as a result of section 613(4) or 614(2), (3) or (4) of ICTA or section 186 of FA 2004 (exemptions about pensions and annuities).
(7)
Section 261G of TCGA 1992 deals with the effect on the repurchase price for capital gains tax purposes of an amount being treated under section 607 as a payment of interest.