CFM38020 | Loan relationships: tax avoidance: overview: other anti-avoidance rules

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Other tax avoidance rules

Apart from the ‘unallowable purposes’ rule, the arm’s length rules and the regime-wide anti avoidance rule (CFM38010), there are a number of other rules, in the loan relationships legislation and elsewhere, intended to address avoidance schemes.

• The ‘disguised interest’ rules in CTA09/PT6/CH2A (CFM42000), which are a successor to the ‘shares as debt’ rules formerly in CT09/PT6/CH7 (CFM45000). Note that these rules take precedence over the arbitrage’ rules involving ‘hybrid securities F(No.2)A05/SCH3).

• The ‘transfers of income streams’ rules in FA09/SCH25 (CFM77000).

• ‘Late-paid’ interest (CFM35800).

• Company migration (CFM33250).

• ‘Structured finance arrangements’ or ‘factoring’ legislation (CFM73000).

• Index-linked gilt-edged securities (CFM39100)

• Derecognition schemes (CFM39200)

• Group mismatch schemes (CFM77500)

Repealed anti-avoidance rules

• The following tax avoidance rules have been repealed by F(No.2)A15, as a result of the introduction of the {RAAR}:

• Artificial payments of interest - CTA09/S443 (CFM39020)

• Reset bonds - CTA09/S454 (CFM39040)

• Consideration not fully recognised by accounting practice - CTA09/S455 (CFM39080)

• Connected parties deriving benefit from creditor relationships (CFM39035)

• In addition, the rule addressing mismatches from convertible loans and other hybrid securities between connected companies (CFM37730) has been repealed by FA11.