Corporation Tax Act 2010 section 777

Loan or credit transaction defined

Section 777 defines what counts as a "loan or credit transaction" for the purposes of the rules in sections 778 and 779 that target artificial arrangements designed to disguise interest payments.

• A loan or credit transaction includes any transaction connected with the lending of money, the giving of credit, or the variation of terms on which money is lent or credit is given.
• It also covers transactions designed to enable or facilitate arrangements concerning lending or credit.
• The definition applies regardless of whether the transaction takes place directly between the lender and borrower (or creditor and debtor), or between connected persons acting on their behalf.
• The provision is aimed at artificial arrangements that dress up interest payments in another form, such as granting annuities or transferring income-bearing assets in connection with interest-free loans.