Income Tax Act 2007 section 568

Meaning of "stock lending arrangement"

Section 568 defines what constitutes a "stock lending arrangement" for income tax purposes, drawing on earlier provisions from ICTA and TCGA.

• A stock lending arrangement is an arrangement where one person (the lender) transfers securities to another person (the borrower), with the borrower being obliged to return equivalent securities to the lender.
• The securities transferred back do not need to be the identical securities originally lent, but they must be of the same type, nominal value, and quantity as the original securities.
• The definition covers arrangements where the transfer of securities is made by or through an intermediary, not only direct transfers between lender and borrower.
• The purpose of the definition is to ensure that genuine stock lending transactions receive appropriate tax treatment, distinguishing them from outright disposals or other types of securities transactions.