Part 2Anti-avoidance and revenue protection

Loan relationships and derivative contracts

45Relationships treated as loan relationships etc: repos

(1)

In paragraph 4 of Schedule 13 to FA 2007 (ignoring effect on borrower of sale of securities), in sub-paragraph (4) omit the “and” at the end of paragraph (a) and after that paragraph insert—

“(aa)

an amount representative of income payable in respect of the securities is not to be ignored as a result of sub-paragraph (3)(b) if it is, in accordance with generally accepted accounting practice, so recognised or taken into account, and”.

(2)

In section 550 of CTA 2009 (ignoring effect on borrower of sale of securities)—

(a)

in subsection (4), for “and (6)” substitute “ to (6) ”, and

(b)

after subsection (5) insert—

“(5A)

For the purposes of the charge to corporation tax, an amount representative of income payable in respect of the securities is not to be ignored as a result of subsection (3)(b) if—

(a)

it is, in accordance with generally accepted accounting practice, recognised in determining the borrower's profit or loss for that or any other period, or

(b)

it is taken into account in calculating the amounts which are so recognised.”

(3)

The amendments made by this section are treated as always having had effect.