Corporation Tax Act 2009

550 Ignoring effect on borrower of sale of securities U.K.

(1) This section applies if a company (“the borrower”)—

(a) has a debtor repo or a debtor quasi-repo, or

(b) has a liability which is discharged under a relevant arrangement.

(2) A relevant arrangement is one—

(a) in relation to which conditions C and D in section 549 are met, and

(b) the main purpose or one of the main purposes of which is the obtaining of a tax advantage.

(3) For the purposes of the charge to corporation tax in respect of income of the borrower arising while the arrangement is in force, the Corporation Tax Acts apply as if—

(a) the borrower held the securities which are initially sold for any period for which the arrangement is in force, and

(b) the borrower did not receive in that period amounts representative of income payable in respect of the securities.

(4) Subsection (3) is subject to subsections (5) to [F1 (5C)] .

(5) No amount is to be charged to corporation tax as a result of subsection (3)(a) unless—

(a) it is, in accordance with generally accepted accounting practice, recognised in determining the borrower's profit or loss for that or any other period, or

(b) it is taken into account in calculating the amounts which are so recognised.

[F2 (5A) For the purposes of the charge to corporation tax, an amount representative of income payable in respect of the securities is not to be ignored as a result of subsection (3)(b) if—

(a) it is, in accordance with generally accepted accounting practice, recognised in determining the borrower's profit or loss for that or any other period, or

(b) it is taken into account in calculating the amounts which are so recognised.]

[F3 (5B) Nothing in subsection (3) entitles the borrower to double taxation relief in respect of any income payable in respect of overseas securities.

(5C) But nothing in subsection (3) affects the entitlement of the borrower to double taxation relief in respect of any overseas tax deducted from any amount representative of income payable in respect of overseas securities.

(5D) In subsection (5C) “overseas tax” means tax under the law of a territory outside the United Kingdom.]

F4 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) For the purposes of this section “double taxation relief” means any relief given under or as a result of [F5 Part 2 of TIOPA 2010].

Textual Amendments

F1 Word in s. 550(4) substituted (1.1.2014) by Finance Act 2013 (c. 29), Sch. 29 paras. 37(a), 52

F2 S. 550(5A) inserted (retrospectively) by Finance Act 2010 (c. 13), s. 45(2)(b)(3)

F3 S. 550(5B)-(5D) inserted (1.1.2014) by Finance Act 2013 (c. 29), Sch. 29 paras. 37(b), 52

F4 S. 550(6) omitted (1.1.2014) by virtue of Finance Act 2013 (c. 29), Sch. 29 para. 37(c), 52

F5 Words in s. 550(7) substituted (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. 8 para. 92 (with Sch. 9 paras. 1-9, 22)