Income Tax Act 2007 section 809BZC

Payments treated as borrower's income

Section 809BZC treats certain payments under a type 1 finance arrangement as income of the borrower for income tax purposes, even where the arrangement would not otherwise produce a taxable result under the main anti-avoidance provisions.

• Where a type 1 finance arrangement would not trigger the anti-avoidance consequences under either income tax or corporation tax rules, the payments under the arrangement are nonetheless treated as the borrower's income
• The borrower must be within the charge to income tax, either directly or as a member of a partnership where at least one partner is within the charge to income tax
• The payments are treated as the borrower's income payable in respect of the security, regardless of whether those same payments are also treated as another person's income for tax purposes
• The meaning of "relevant effect" for income tax purposes and "corresponding corporation-tax effect" for corporation tax purposes are defined by cross-reference to the detailed provisions in section 809BZB(3) to (6) and section 759(3) to (6) of CTA 2010 respectively