Part 6Relationships treated as loan relationships etc
Chapter 6Alternative finance arrangements
Introduction
501Introduction to Chapter
1
This Chapter provides for alternative finance arrangements between companies and financial institutions to be treated as loan relationships (see sections 509 and 510).
2
In this Part “alternative finance arrangements” means—
a
purchase and resale arrangements,
b
diminishing shared ownership arrangements,
c
deposit arrangements,
d
profit share agency arrangements, and
e
investment bond arrangements.
3
In this Chapter—
a
“purchase and resale arrangements” means arrangements to which section 503 applies,
b
“diminishing shared ownership arrangements” means arrangements to which section 504 applies,
c
“deposit arrangements” means arrangements to which section 505 applies,
d
“profit share agency arrangements” means arrangements to which section 506 applies, and
e
“investment bond arrangements” means arrangements to which section 507 applies.
4
For the meaning of “financial institution”, see section 502.
502Meaning of “financial institution”
1
In this Chapter “financial institution” means—
a
a bank, as defined by F4section 1120 of CTA 2010,
b
a building society within the meaning of the Building Societies Act 1986 (c. 53),
c
a wholly-owned subsidiary of a bank within paragraph (a) or a building society within paragraph (b),
d
a person authorised by a licence under Part 3 of the Consumer Credit Act 1974 (c. 39) to carry on a consumer credit business or consumer hire business within the meaning of that Act,
e
f
a person authorised in a jurisdiction outside the United Kingdom—
i
to receive deposits or other repayable funds from the public, and
ii
to grant credits for its own account,
h
a person who is authorised in a jurisdiction outside the United Kingdom to carry on a business which consists of effecting or carrying out contracts of insurance or substantially similar business but not an insurance special purpose vehicle as defined in F6section 139(1) of FA 2012.
2
For the purposes of subsection (1)(c) a company is a wholly-owned subsidiary of a bank or building society (“the parent”) if it has no members except—
a
the parent or persons acting on behalf of the parent, and
b
the parent's wholly-owned subsidiaries or persons acting on behalf of the parent's wholly-owned subsidiaries.