Corporation Tax Act 2010 section 810

No tax credits for borrower under debtor repo or debtor quasi-repo

Section 810 prevents a borrower in certain unusual repo or quasi-repo arrangements from claiming tax credits on dividends where the borrower retains entitlement to the dividends but still receives a manufactured dividend.

• This section targets unusual repo arrangements where the borrower does not pass on the entitlement to dividends to the counterparty
• Despite retaining dividend entitlement, the borrower in these arrangements also receives a manufactured dividend from the counterparty
• The rule denies any tax credit that would otherwise be available to the borrower in respect of dividends under such debtor repo or debtor quasi-repo transactions
• The provision was originally based on section 231AB of the Income and Corporation Taxes Act and was subsequently amended by the Finance Act 2013