Section 759 — Corporation Tax Act 2010: Certain tax consequences not to have effect

Certain tax consequences not to have effect 759 1 This section applies if a type 1 finance arrangement would have the relevant effect (ignoring this section).

2 The arrangement is not to have that effect.

3 The relevant effect is that—

a an amount of income on which the borrower or a person connected with the borrower would otherwise have been charged to corporation tax is not so charged, b an amount which would otherwise have been brought into account in calculating for corporation tax purposes any income of the borrower or of a person connected with the borrower is not so brought into account, or c the borrower or a person connected with the borrower becomes entitled to an income deduction.

4 But if the borrower is a partnership the relevant effect is that—

a an amount of income on which a member of the partnership would otherwise have been charged to corporation tax is not so charged, b an amount which would otherwise have been brought into account in calculating for corporation tax purposes any income of a member of the partnership is not so brought into account, or c a member of the partnership becomes entitled to an income deduction.

5 For the purposes of this section the borrower and the lender are not connected with one another.

6 An income deduction is—

a a deduction in calculating income for corporation tax purposes, or b a deduction from total profits.