Taxation (International and Other Provisions) Act 2010 section 109

Repo cases in which no disregard under section 108

Section 109 creates an exception to the section 108 disregard rule in cases where a company has entered into a debtor repo arrangement in relation to a loan relationship.

• Where a company has sold a debt under a debtor repo, interest accruing on that debt during the repo period does not benefit from the section 108 disregard
• The exception applies to tax on interest that accrues after the company has ceased to be a party to the loan relationship because of the initial sale under the repo
• The repo period runs from the date of the initial sale until either the subsequent repurchase takes place or it becomes clear that the repurchase will not happen
• The definition of a debtor repo and its associated terms are drawn from section 548 of the Corporation Tax Act 2009