Taxation of Chargeable Gains Act 1992 section 151O

Provision not at arm's length: exclusion of arrangements from sections 151J to 151N

Section 151O prevents certain financial arrangements from qualifying as alternative finance arrangements (and thus from benefiting from the special tax treatment in sections 151J to 151N) where those arrangements are not conducted at arm's length and the recipient of the return is not subject to tax.

• Where alternative finance arrangements are not at arm's length under transfer pricing rules, and the person receiving the return is not taxed on it, the arrangements lose their status as alternative finance arrangements
• The five types of arrangement that can be excluded are: purchase and resale arrangements, diminishing shared ownership arrangements, deposit arrangements, profit share agency arrangements, and investment bond arrangements
• The exclusion applies where TIOPA 2010 section 147 requires profits and losses to be recalculated on an arm's length basis rather than in accordance with the actual terms of the arrangements
• "Relevant return" means any amount that would be treated as alternative finance return if the arrangements had qualified as alternative finance arrangements