Corporation Tax Act 2009 section 510

Application of Part 5 to particular alternative finance arrangements

Section 510 explains how the loan relationship rules in Part 5 of the Corporation Tax Act 2009 apply to each of the five types of alternative finance arrangement, by treating the amounts involved as if they were loans and the alternative finance return as if it were interest.

• For purchase and resale arrangements, the initial purchase price is treated as a loan from the first purchaser to the second purchaser, and the alternative finance return is treated as interest on that loan.
• For diminishing shared ownership and deposit arrangements, the financier's acquisition cost or the deposited amount respectively is treated as a loan, with the alternative finance return treated as interest.
• For profit share agency arrangements, the amount provided by the principal is treated as a loan to the agent, and for investment bond arrangements, the alternative finance return is treated as interest under the deemed loan relationship.
• Key terms such as "customer", "depositor", "financier", "first purchaser", "first purchase price", "principal", and "second purchaser" are defined by reference to the sections that establish each type of arrangement.