Section GB 45 — Income Tax Act 2007: Arrangements involving money not at risk

GB 45 Arrangements involving money not at risk Application of section GB 46 (1) Section GB 46 can apply to an arrangement when— (a) a person sells or issues, or promotes the selling or issuing of, the arrangement, whether or not for remuneration; and (b) a person (the participant ) who is a party to the arrangement or affected by it, considered together with their affected associates, has for an assessment period a total amount of deductions from the arrangement that is more than their total amount of assessable income from the arrangement, having regard to the rules in subsection (2); and (c) as part of or for the purposes of the arrangement, the participant or an affected associate borrows a limited-recourse amount under a limited-recourse loan; and (d) on the relevant balance date, the total of the limited-recourse amounts of the limited-recourse loans of the participant and affected associates is more than half of the total cost of their arrangement property on the relevant balance date; and (e) on the relevant balance date, the total cost of their arrangement property is more than 142.85% of the total cost of the part of the property that is acceptable property. Certain deductions or income disregarded (2) For the purposes of subsection (1)(b), the following amounts are disregarded: (a) a deduction under section GB 46 : (b) a tax loss component of a loss-attributing qualifying company (LAQC) to the extent to which it is attributed to shareholders under section HA 20 (Attribution of tax losses): (c) an amount of income under section GB 46 . Some definitions (3) In this section,— acceptable property is— (a) land: (b) buildings: (c) plant: (d) machinery: (e) shares in a listed company that in total represent a direct voting interest of 10% or less in the listed company: (f) a share and an option that are acquired or created with an intention that the share or option will produce income that is employment income of a participant under section CE 1(1)(d) (Amounts derived in connection with employment): (g) a share in a foreign company, if the proceeds of a disposal of the share would not be assessable income of the holder other than under the FIF rules arrangement property means property held as part of the arrangement by the participant and affected associates assessment period is any of— (a) the earliest income year (the first income year ) in which an interest in the arrangement was acquired by the participant or an affected associate of the participant: (b) the first income year and the next income year: (c) the first income year and the next 2 income years relevant balance date means the balance date, or the latest balance date, of the participant and affected associates that ends the assessment period. Defined in this Act: acceptable property , affected associate , arrangement , arrangement property , assessable income , assessment period , deduction , direct voting interest , dispose , employment income , FIF rules , foreign company , income , income year , LAQC, limited-recourse amount , limited-recourse loan , relevant balance date , share , shareholder , tax loss component , Compare: 2004 No 35 s GC 29(1) Section GB 45(3) acceptable property : amended (with effect on 1 April 2008), on 6 October 2009, by section 241 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).