Corporation Tax Act 2009 section 518

Investment bond arrangements: treatment as securities

Section 518 ensures that alternative finance investment bonds are treated as securities for corporation tax purposes, so that the same tax rules apply to them as apply to conventional debt instruments.

• Investment bond arrangements are classified as securities for all purposes of the Corporation Tax Acts
• References to redemption in tax legislation are read as references to making the redemption payment under the bond arrangements
• References to interest are read as references to alternative finance return, ensuring the economic equivalent of interest receives the same tax treatment
• The bond-issuer is treated as a debtor party to a capital market arrangement for the purposes of the securitisation companies rules in Chapter 4 of Part 13 of CTA 2010