Corporation Tax Act 2010 section 760

Payments treated as borrower's income

Section 760 ensures that, where a type 1 finance arrangement would not already be caught by the main anti-avoidance rule in section 759 (or its income tax equivalent), certain payments under the arrangement are nevertheless treated as the borrower's income for corporation tax purposes.

• This section applies only where a type 1 finance arrangement would not already trigger the tax consequences under section 759 or the corresponding income tax provision in section 809BZB of the Income Tax Act 2007 — meaning those provisions do not need to intervene because the arrangement would not have the relevant tax effect in the first place.
• The borrower must be either a company within the charge to corporation tax, or a partnership that includes at least one company within the charge to corporation tax.
• Where the section applies, the payments made under the finance arrangement (as described in section 758(2)(c)) must be treated as income of the borrower for corporation tax purposes, payable in respect of the security — even if those same payments are also treated as the income of another person for tax purposes.
• The meaning of "relevant effect" used in this section follows the same definition set out in section 759(3) to (6), and the "corresponding income-tax effect" follows the parallel definition in section 809BZB(3) to (6) of the Income Tax Act 2007.