Section 506 — Corporation Tax Act 2009: Profit share agency arrangements

Profit share agency arrangements 506 1 This section applies to arrangements if under them—

a a person (“the principal”) appoints an agent, ab one or both of the principal and agent is a financial institution, b the agent uses money provided by the principal with a view to producing a profit, c the principal is entitled, to a specified extent, to profits resulting from the use of the money, d the agent is entitled to any additional profits resulting from its use (and may also be entitled to a fee paid by the principal),

and e payments made because of the principal's entitlement to profits equate, in substance, to the return on an investment of money at interest.

2 This section is subject to section 508 (provision not at arm's length: exclusion of arrangements from sections 503 to 505, this section and section 507).