Taxation of Chargeable Gains Act 1992 section 151H

Introduction

Section 151H introduces the chapter dealing with the capital gains tax treatment of alternative finance arrangements, which are typically used to accommodate Sharia-compliant financing structures.

• Alternative finance arrangements encompass five types: purchase and resale, diminishing shared ownership, deposit, profit share agency, and investment bond arrangements
• Each type of arrangement is specifically defined in its own section of the legislation, and the concept of "alternative finance return" (the economic equivalent of interest or profit under these structures) is separately defined
• The term "financial institution" is given a specific meaning for the purposes of this chapter, identifying which entities can participate in these arrangements
• There is a power to extend the alternative finance rules to additional types of arrangement by statutory order, and further detailed provisions apply to investment bond arrangements under Schedule 61 to the Finance Act 2009