Corporation Tax Act 2010 section 938I

Schemes involving repos or quasi-repos

Section 938I ensures that the group mismatch rules can apply to intra-group repo and quasi-repo arrangements where only the borrowing party treats the transaction as a loan relationship.

• The section applies where a scheme group member has a debtor repo or debtor quasi-repo and the advance under that arrangement is received, directly or indirectly, from another member of the same scheme group.
• The group mismatch rules are extended so that amounts taxed under any corporation tax on income provision — not just the loan relationships rules in Part 5 of CTA 2009 — are treated as if they were brought into account under Part 5.
• The "repayment of the advance" means the consideration paid when the securities are repurchased under the repo or quasi-repo arrangement.
• The definitions of "debtor repo" and "debtor quasi-repo" are taken from sections 548 and 549 of CTA 2009.