Taxation (International and Other Provisions) Act 2010 Schedule 9 paragraph 22

Application of sections 109 and 110 in relation to pre-1 October 2007 cases

Paragraph 22 of Schedule 9 provides transitional rules for how the disregard of foreign tax on loan relationship interest applies to repo and stock lending arrangements that were entered into before 1 October 2007.

• Sections 109 and 110 (the current repo and stock lending exceptions) do not apply to arrangements that came into force before 1 October 2007.
• Instead, pre-1 October 2007 arrangements are governed by a substituted provision (section 109A) that uses an older, broader definition of repo or stock lending arrangements.
• Under section 109A, foreign tax on loan relationship interest is not disregarded where the company has transferred its rights under a repo or stock lending arrangement and interest accrues during the period of that arrangement.
• The transitional rule ensures that arrangements entered into on or after 1 October 2007 continue to be dealt with under the current sections 109 and 110 without modification.