Corporation Tax Act 2010 section 1019

Relevant alternative finance return

Section 1019 ensures that returns from certain alternative finance arrangements (such as Sharia-compliant products) are not treated as company distributions for corporation tax purposes.

• Returns arising from qualifying alternative finance arrangements are excluded from being treated as distributions under the Corporation Tax Acts.
• For corporation tax purposes, relevant alternative finance return includes returns falling within Part 6 of CTA 2009 (section 513) and redemption payments under investment bond arrangements (section 507 of CTA 2009).
• For income tax purposes, the equivalent provisions are found in Part 10A of ITA 2007 (section 564L) and investment bond arrangements under section 564G of ITA 2007.
• The exclusion prevents what is economically equivalent to interest from being reclassified as a distribution, preserving the intended tax treatment of these financing structures.