Part 6Relationships treated as loan relationships etc

Chapter 6Alternative finance arrangements

Treatment as loan relationships

510Application of Part 5 to particular alternative finance arrangements

1

In the case of purchase and resale arrangements, Part 5 applies in relation to A as if—

a

the first purchase price were the amount of a loan made by the first purchaser to the second purchaser, and

b

alternative finance return payable under the arrangements were interest payable on the loan.

2

In the case of diminishing shared ownership arrangements, Part 5 applies in relation to A as if—

a

the consideration paid by the first owner for the acquisition of the first owner's beneficial interest (“the acquisition consideration”) were the amount of a loan made by A to the eventual owner, and

b

alternative finance return payable under the arrangements were interest payable on the loan.

3

In the case of deposit arrangements, Part 5 applies in relation to A as if—

a

any amount deposited under the arrangements were the amount of a loan made by the depositor to the financial institution, and

b

alternative finance return payable under them were interest on the loan.

4

In the case of profit share agency arrangements, Part 5 applies in relation to A as if—

a

any amount provided under the arrangements were the amount of a loan made by the principal to the agent, and

b

alternative finance return payable under them were interest on the loan.

5

In the case of investment bond arrangements, Part 5 applies in relation to A as if alternative finance return payable to or by A under them were interest payable under the loan relationship.

6

In this section—

  • “the depositor” has the same meaning as in section 505 (see subsection (1) of that section),

  • “the eventual owner” has the same meaning as in section 504 (see subsection (1) of that section),

  • “the first owner” has the same meaning as in section 504 (see subsection (1) of that section),

  • “the first purchaser” has the same meaning as in section 503 (see subsection (1) of that section),

  • “the first purchase price” has the same meaning as in section 503 (see subsection (3) of that section),

  • “the principal” has the same meaning as in section 506 (see subsection (1) of that section), and

  • “the second purchaser” has the same meaning as in section 503 (see subsection (1) of that section).

7

For the meaning of “alternative finance return”, see sections 511 to 513.