Corporation Tax Act 2009 section 525

Meaning of "interest-like investment"

Section 525 defines the term "interest-like investment" as used in the preceding section, clarifying what types of investment returns are treated similarly to interest for the purposes of the disguised interest rules.

• An "interest-like investment" is a concept used to identify arrangements where returns on an investment are economically equivalent to interest, even if not formally structured as interest payments.
• The definition originates from section 91A(7) to (9) of the Finance Act 1996 and was carried forward into the Corporation Tax Act 2009.
• This term works in conjunction with the preceding section (section 524) to ensure that investments producing interest-like returns are brought within the loan relationships rules, preventing companies from avoiding the regime through the use of alternative investment structures.
• The section was subsequently amended by the Finance Act 2009 (Schedule 24, paragraphs 8(c)(i) and 12) to refine the scope of the definition.