Avoidance involving repos or stock lendingU.K.
19(1)In Schedule 9 to FA 1996 (loan relationships) paragraph 15 is amended as follows.U.K.
(2)At the end of sub-paragraph (2) (disposals and acquisitions to which the paragraph applies) add “and as is, in the case of those arrangements, the disposal or acquisition effected by—
(a)the transfer by A to B mentioned in sub-paragraph (3)(a) below, or
(b)any transfer to A that gives effect to the entitlement or requirement described in sub-paragraph (3)(b) below.”.
(3)In sub-paragraph (3) (meaning of “repo or stock-lending arrangements”)—
(a)in paragraph (a), after “one person” insert “ (“A”) ” and after “another” insert “ (“B”) ”;
(b)in paragraph (b), for “the transferor” substitute “ A ”.
(4)In sub-paragraph (4A) (which states certain consequences of sub-paragraph (1) for each party), omit paragraph (b) (transferee not to be regarded as a party to the loan relationship) and the word “and” before it, and for the words following that paragraph substitute— “ but nothing in sub-paragraph (1) above prevents the person to whom those rights are transferred from being regarded for the purposes of this Chapter as being party to the loan relationship as a result of the transfer. ”.
(5)The amendments made by this paragraph have effect in any case where the transfer mentioned in paragraph 15(3)(a) of Schedule 9 to FA 1996 is on or after 2nd December 2004, whenever the repo or stock-lending arrangements in question were entered into.
(6)In any case involving an arrangement for the sale and repurchase of securities where the arrangement—
(a)falls within section 737E(1)(b) of ICTA, and
(b)involves securities (“substituted securities”) being substituted for other securities,
the substitution of any securities on or after 2nd December 2004 shall be treated for the purposes of sub-paragraph (5) as if it were a transfer falling within paragraph 15(3)(a) of Schedule 9 to FA 1996.