Finance Act 2017

Exclusions: relevant repayments

8 After section 554R insert—

“554RA Exclusions: relevant repayments

(1) This section applies (subject to subsection (5)) if—

(a) a right to repayment of principal under a relevant loan (the “repayment right”) is held by or on behalf of a person (“P”), and

(b) on or after 9 December 2010, a sum of money (the “repayment sum”) is acquired by or on behalf of P by way of repayment of principal under the relevant loan.

(2) In this section “relevant loan” means a loan made on or after 6 April 1999.

(3) Subsection (4) applies if—

(a) on its acquisition, the repayment sum is the subject of a relevant step within section 554B taken by P, or

(b) for the sole purpose of the acquisition, the making of the payment of the repayment sum is a relevant step within section 554C(1)(a).

(4) Chapter 2 does not apply by reason of the relevant step if, on its acquisition, the repayment sum is held by or on behalf of P on the same basis as that on which the repayment right was held by or on behalf of P immediately before the acquisition.

(5) This section does not apply where there is any connection (direct or indirect) between the acquisition by or on behalf of P of the repayment sum and a tax avoidance arrangement (other than the arrangement under which the relevant loan was made).”