CFM72310 | Other tax rules on corporate finance: securitisation: periods beginning on or after 1 January 2007: ‘alternative finance’ arrangements

Alternative finance investment bonds

ITA 2007/PT10A provide tax rules on a form of Shari’a compliant bond known as ‘sukuk’. The legislation refers to this as an ‘alternative finance investment bond’. CFM44000.

There is no debt obligation to investors in such instruments, but the tax rules in ITA 2007/PT10A treat them as securities for tax purposes, where they are economically equivalent to conventional bonds. A company issuing sukuk can therefore come within the securitisation regulations, subject to meeting the other conditions in CTA10/S623 and in the Taxation of Securitisation Companies Regulations 2006.