Finance Act 2012

12 (1) For the purposes of paragraphs 13 and 14— U.K.

(a) amount A is the total amount of relief given in respect of E's contribution,

(b) amount B is the total of the following amounts—

(i) any amounts of income which are charged to tax by virtue of paragraph 9, 10 or 11 above (as the case may be),

(ii) any amounts brought into account in calculating income for tax purposes by virtue of paragraph 9, 10 or 11 above (as the case may be) (so far as not reflected in sub-paragraph (i)), and

(iii) any amounts stopped from being the subject of an income deduction by virtue of paragraph 9, 10 or 11 above (as the case may be) (so far as not reflected in sub-paragraph (i) or (ii)), and

(c) subject to sub-paragraph (7), amount C is the amount of the payment mentioned in sub-paragraph (4) or (6) (as the case may be) so far as the payment—

(i) is made under the asset-backed arrangement on the completion day,

(ii) is not reflected in amount B,

(iii) is not the subject of an income deduction, and

(iv) is not a contribution paid by E under the relevant scheme but nevertheless becomes (directly or indirectly) part of the sums held for the purposes of the relevant scheme.

(2) In sub-paragraph (1) “income deduction” means a deduction to which any person is entitled—

(a) in calculating income for tax purposes, or

(b) from total income or total profits.

(3) Sub-paragraph (4) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196B of FA 2004.

(4) The payment referred to in sub-paragraph (1)(c) is the payment (if any) which the borrower, or a person connected with the borrower, makes to the lender, or a person connected with the lender, in order to acquire—

(a) the security, or

(b) any asset substituted for the security under the asset-backed arrangement.

(5) Sub-paragraph (6) applies if the section which would have applied as mentioned in paragraph 4(1)(c) above is section 196C or 196D of FA 2004.

(6) The payment referred to in sub-paragraph (1)(c) is the payment (if any) which E, or a person connected with E, makes—

(a) to the lender, or a person connected with the lender, in order to reverse the relevant change in relation to the partnership, or

(b) otherwise to a responsible authority in order to buy out the authority's interest in any partnership involved in the asset-backed arrangement.

(7) Amount C is to be taken to be nil if—

(a) the completion day is on or after 22 February 2012,

(b) on or before the completion day, a commitment (whether or not legally enforceable and whether or not subject to any conditions) is given (directly or indirectly) to a relevant person, and

(c) the commitment—

(i) is a commitment to secure that a person receives money or another asset, and

(ii) is linked (directly or indirectly) to the making of the payment covered by amount C.

(8) In sub-paragraph (7)(b) “relevant person” means—

(a) E;

(b) a person connected with E;

(c) a person acting (directly or indirectly) at the direction or request, or with the agreement, of E or a person connected with E;

(d) a person chosen (directly or indirectly) by E or a person connected with E;

(e) a person within a class of person chosen (directly or indirectly) by E or a person connected with E;

(f) a partnership.

(9) But “relevant person” does not include a responsible authority.