Part 16Factoring of income etc

Chapter 1Transfers of income streams

752Application of Chapter

1

This Chapter applies if—

a

a company within the charge to corporation tax (“the transferor”) makes a transfer to another person (“the transferee”) of a right to relevant receipts (see subsection (2)), and

b

(subject to subsection (3)) the transfer of the right is not a consequence of the transfer to the transferee of an asset from which the right to relevant receipts arises.

2

Relevant receipts” means any income—

a

which (but for the transfer) would be charged to corporation tax as income of the transferor, or

b

which (but for the transfer) would be brought into account in calculating profits of the transferor for the purposes of corporation tax.

3

Despite subsection (1)(b), this Chapter applies if the transfer of the right is a consequence of the transfer to the transferee of all rights under an agreement for annual payments; and for the purposes of subsection (1)(b) the transfer of an asset under a sale and repurchase agreement is not to be regarded as a transfer of the asset.

4

Section 753 makes provision as to the consequences of this Chapter applying.

5

For exclusions from this Chapter, see—

a

section 754 (amount otherwise taxed), and

b

section 755 (transfer by way of security).

6

Section 756 makes special provision about transfers of partnership shares.

7

Section 757 contains supplementary provisions.