Section 771 — Corporation Tax Act 2010: Exceptions

Exceptions 771 1 A finance arrangement code does not apply if the whole of the advance under the arrangement—

a is charged to tax on a relevant person as an amount of income, b is brought into account in calculating for tax purposes any income of a relevant person, or c is brought into account for the purposes of any provision of CAA 2001 as a disposal receipt, or proceeds from a balancing event or disposal event, of a relevant person.

2 Treat subsection (1)(c) as not met if—

a the receipt gives rise, or proceeds give rise, to a balancing charge, and b the amount of the balancing charge is limited by any provision of CAA 2001.

3 A finance arrangement code does not apply if at all times the whole of the advance under the arrangement—

a is a debtor relationship of a relevant person for the purposes of Part 5 of CTA 2009 (loan relationships), or b would be a debtor relationship of a relevant person for those purposes if that person were a company within the charge to corporation tax.

4 In subsection (3) references to a debtor relationship do not include references to a relationship to which Chapter 2 of Part 6 of CTA 2009 applies (relevant non-lending relationships).

5 A finance arrangement code does not apply so far as—

a section 263A of TCGA 1992 applies in relation to the arrangement (agreements for sale and repurchase of securities), or b Schedule 13 to FA 2007 or Chapter 10 of Part 6 of CTA 2009 applies in relation to the arrangement (sale and repurchase of securities, and repos).

6 A finance arrangement code does not apply so far as Chapter 6 of Part 6 of CTA 2009, Part 10A of ITA 2007 or Chapter 4 of Part 4 of TCGA 1992 has effect in relation to the arrangement (alternative finance arrangements).

7 A finance arrangement code does not apply so far as the security is plant or machinery which is the subject of a sale and finance leaseback.

8 For the purposes of subsection (7) apply section 221 of CAA 2001 to determine whether plant or machinery is the subject of a sale and finance leaseback.

9 A finance arrangement code does not apply so far as sections 228B and 228C of CAA 2001 (finance leaseback) apply in relation to the arrangement. 9A A finance arrangement code does not apply if the arrangement is a right-of-use lease—

a under which the relevant person is a lessee, and b which, were that person required under generally accepted accounting practice to determine whether the lease falls to be treated in the accounts of that person as a finance lease or loan, would not fall to be so treated. 9B In subsection (9A) “right-of-use lease” has the meaning given in Part 2 of CAA 2001 (see section 70YI(1) of that Act).

10 Section 772 defines a relevant person for the purposes of this section.