Part 13Tax avoidance
C2C1F2Chapter 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))
F1Type 3 arrangements
Ss. 809BZJ-809BZL and cross-heading 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. 4 (with Sch. 9 paras. 1-9, 22)
809BZLDeemed interest
1
This section applies if—
a
there is a type 3 finance arrangement,
b
a relevant member is a person within the charge to income tax, and
c
in accordance with generally accepted accounting practice the partnership's accounts record an amount as a finance charge in respect of the advance.
2
For income tax purposes the relevant member may treat the amount as interest payable by the partnership on a loan.
3
The reference in subsection (1) to the partnership's accounts includes a reference to the accounts of any relevant member.
4
If an amount is treated as interest (“deemed interest”) under subsection (2), to find out when it is paid—
a
treat the payments mentioned in section 809BZJ(2)(d) as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance,
b
treat the interest elements of the payments as paid when the payments are paid, and
c
treat the deemed interest as paid at the times when the interest elements are treated as paid.
5
A relevant member is a person who—
a
was a member of the partnership immediately before the relevant change in relation to it occurred, and
b
is not the lender.
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)