Corporation Tax Act 2010 section 258

Deposit arrangements

Section 258 sets out how the group relief provisions apply to alternative finance deposit arrangements, by treating them as equivalent to conventional loan relationships.

• When a person deposits money with a financial institution under qualifying alternative finance arrangements, the deposit is treated as a loan made by the depositor to that institution, with the loan amount equal to the sum deposited.
• Where the deposit is made in instalments, these are treated as progressive drawdowns of the loan, with the first instalment date treated as the first drawdown date and cumulative instalments treated as the cumulative amount drawn down.
• The outstanding capital on the notional loan is equal to the balance of the repayable deposit, and any repayment of the deposit is treated as a repayment of the loan.
• The beneficial owner of the loan is the person entitled to repayment of the deposit, and any disposal of the right to receive repayment of the deposit is treated as a disposal of the loan or part of it.