Corporation Tax Act 2009 section 539

Introduction to Chapter

Section 539 explains when a company has a "manufactured interest relationship" and defines the key terms used in the Chapter dealing with manufactured interest and payments representative of interest.

• A company has a manufactured interest relationship when an amount is payable by, on behalf of, or to the company under arrangements relating to the transfer of an asset that represents a loan relationship
• The amount must either be representative of interest under that loan relationship, or will be treated as representative of such interest when it is paid
• "Manufactured interest" means the amount payable under those arrangements, while "the real interest" means the actual interest under the underlying loan relationship
• This Chapter governs how Part 5 of the Act (the loan relationships rules) applies to these manufactured interest relationships