Corporation Tax Act 2009 section 515

Diminishing shared ownership arrangements: further provision

Section 515 sets out how diminishing shared ownership arrangements are treated for corporation tax purposes, ensuring they are not classified as partnerships and clarifying the tax treatment of leases and enforcement actions under such arrangements.

• Diminishing shared ownership arrangements are not treated as a partnership for corporation tax purposes, even though both the financier and customer hold beneficial interests in the same asset.
• Where the financier grants a lease of the asset to the customer as part of the arrangement, neither the granting nor the termination of that lease counts as a disposal or acquisition of part of the asset for corporation tax.
• If the customer breaches an obligation under the arrangements and the financier becomes entitled to the asset, any dealings by the financier (or any appointed person) to enforce that entitlement are treated as if they were carried out as nominee on behalf of the customer.
• Key definitions apply: "the asset" is the asset in which beneficial interest is acquired and disposed of under the arrangements; "customer" and "financier" take their meanings from the provisions defining diminishing shared ownership arrangements (sections 504 and 504A).