Section 760 — Corporation Tax Act 2010: Payments treated as borrower's income

Payments treated as borrower's income 760 1 This section applies if—

a a type 1 finance arrangement would not have the relevant effect (ignoring section 759(2)),

b that arrangement would not have the corresponding income-tax effect (ignoring section 809BZB(2) of ITA 2007),

and c the borrower is—

i a company within the charge to corporation tax, or ii a partnership at least one member of which is a company within the charge to corporation tax.

2 The payments mentioned in section 758(2)(c) must be treated for corporation tax purposes as income of the borrower payable in respect of the security.

3 Subsection (2) applies whether or not the payments are also the income of another person for tax purposes.

4 Subsections (3) to (6) of section 759 (meaning of relevant effect) apply for the purposes of this section as for those of that.

5 In subsection (1)(b) “ the corresponding income-tax effect ” means the relevant effect as defined by section 809BZB(3) to (6) of ITA 2007 (provision for income tax corresponding to section 759(3) to (6)).