Part 13Tax avoidance
C2C1F1Chapter 5BFinance arrangements
Pt. 13 Ch. 5B restricted by 2004 s. 12 s. 196I(5)(6) (as inserted 17.7.2012 (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))
Pt. 13 Ch. 5B restricted by 2004 c. 12, s. 196G(2)(3) (as inserted 17.7.2012 (with effect in accordance with Sch. 13 para. 3 of the amending Act) by Finance Act 2012 (c. 14), Sch. 13 para. 1 (with Sch. 13 Pt. 2))
Type 1 arrangements
809BZAType 1 finance arrangement defined
1
For the purposes of this Chapter an arrangement is a type 1 finance arrangement if conditions A and B are met.
2
Condition A is that under the arrangement—
a
a person (“the borrower”) receives money or another asset (“the advance”) from another person (“the lender”),
b
the borrower or a person connected with the borrower makes a disposal of an asset (“the security”) to or for the benefit of the lender or a person connected with the lender, and
c
the lender or a person connected with the lender is entitled to payments in respect of the security.
F22A
For the purposes of subsection (2)(c) it does not matter if an entitlement of the lender or a person connected with the lender is subject to any condition.
3
Condition B is that in accordance with generally accepted accounting practice—
a
the borrower's accounts for the period in which the advance is received record a financial liability in respect of it, and
b
the payments reduce the amount of the financial liability.
4
If the borrower is a partnership the reference to the borrower's accounts includes a reference to the accounts of any member of the partnership.
5
For the purposes of this section the borrower and the lender are not connected with one another.
Pt. 13 Ch. 5B inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 5 para. 2 (with Sch. 9 paras. 1-9, 22)