3. A scheme of a description within any of regulations 4 to 5 is an excluded scheme for the purposes of section 306 of TIOPA (schemes involving the manipulation of rules in Chapter 2).
But this is subject to regulation 12.
4. A scheme is within this regulation if it is a transaction for the repayment of a relevant liability by a relevant group company or group securitisation company using—
(a)funds derived directly from the company’s trading or investment activity,
(b)proceeds from the repayment of a relevant asset of the company within section 263(4)(b) or (d) of TIOPA(1),
(c)proceeds from the issue of ordinary shares or preference shares in the company, or
(d)where the relevant liability is owed to a subsidiary of the company (or a subsidiary of that subsidiary), dividend income received from that subsidiary.
5. A scheme is within this regulation if it is a transaction for the release of a relevant group company or group securitisation company from a relevant liability on terms which would have been entered into between knowledgeable and willing parties dealing at arm’s length.
Section 263(4) was substituted by paragraph 4 of Schedule 5 to the Finance (No 3) Act 2010.