[F1Part 10AU.K.Alternative finance arrangements]

Textual Amendments

F1Pt. 10A inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 2 para. 2 (with Sch. 9 paras. 1-9, 22)

[F2Arrangements that are alternative finance arrangements]U.K.

Textual Amendments

F2S. 564C and cross-heading inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 2 para. 4 (with Sch. 9 paras. 1-9, 22)

[F3564D Diminishing shared ownership arrangements [F4: initial acquisition] U.K.

(1)This section applies to arrangements if under them—

(a)a [F5person] (“[F6the financier]”) acquires a beneficial interest in an asset,

[F7(aa)either—

(i)[F6the financier] is a financial institution or a regulated home purchase plan provider, or

(ii)the arrangements are regulated electronic system facilitated arrangements,]

(b)another person (“[F8the customer]”) also acquires a beneficial interest in it,

(c)[F8the customer] is to make payments to [F6the financier] amounting in aggregate to the consideration paid for the acquisition of [F9the financier’s] beneficial interest (but subject to any adjustment required for such a reduction as is mentioned in subsection (5)),

(d)[F8the customer] is to acquire [F9the financier’s] beneficial interest (whether or not in stages) as a result of those payments,

(e)[F8the customer] is to make other payments to [F6the financier] (whether under a lease forming part of the arrangements or otherwise),

(f)[F8the customer] has the exclusive right to occupy or otherwise to use the asset, and

(g)[F8the customer] is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value).

[F10(1A)Arrangements are regulated electronic system facilitated arrangements if—

(a)the arrangements substantially consist of an article 36H agreement in relation to the enjoyment by [F8the customer] of the rights referred to in subsection (1)(f) and (g) before [F11the customer’s] acquisition of [F9the financier’s] beneficial interest,

(b)[F8the customer] would be regarded, for the purposes of that agreement, as the borrower under it,

(c)[F6the financier] would be regarded, for the purposes of that agreement, as the lender under it, and

(d)[F12the customer and the financier] becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of FISMA 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).]

(2)For the purposes of subsection (1)(a) it does not matter if—

(a)[F6the financier] acquires its beneficial interest from [F8the customer],

(b)[F8the customer], or another person who is not [F6the financier], also has a beneficial interest in the asset, or

(c)[F6the financier] also has a legal interest in it.

(3)Subsection (1)(f) does not prevent [F8the customer] from granting an interest or right in relation to the asset if the conditions in subsection (4) are met.

(4)The conditions are that—

(a)the grant is not to—

(i)[F6the financier],

(ii)a person controlled by [F6the financier], or

(iii)a person controlled by a person who also controls [F6the financier], and

(b)the grant is not required by [F6the financier] or arrangements to which [F6the financier] is a party.

(5)Subsection (1)(g) does not prevent [F6the financier] from—

(a)having responsibility for any reduction in the asset's value, or

(b)having a share in a loss arising out of any such reduction.

(6)This section is subject to section 564H (provision not at arm's length: exclusion of arrangements from section 564C, this section and sections [F13564DA] to 564G).]

[F14(7)In this section—

Textual Amendments

F3S. 564D inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 2 para. 5 (with Sch. 9 paras. 1-9, 22)

F4Words in s. 564D heading inserted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(a), 4

F6Words in s. 564D substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(b), 4

F8Words in s. 564D substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(c), 4

F9Words in s. 564D substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(d), 4

F11Words in s. 564D substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(e), 4

F12Words in s. 564D(1A)(d) substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(f), 4

F13Word in s. 564D(6) substituted (with effect in accordance with Sch. 7 para. 4 of the amending Act) by Finance Act 2025 (c. 8), Sch. 7 paras. 1(3)(g), 4