Section 554C | Relevant steps: payment of sum, transfer of asset etc ^F1

(1)A person (“P”) takes a step within this section if P—^F1

(a)pays a sum of money to a relevant person,^F1

(aa)acquires a right to a payment of a sum of money, or to a transfer of assets, where there is a connection (direct or indirect) between the acquisition of the right and—^F1F2

(i)a payment made, by way of a loan or otherwise, to a relevant person, or^F1F2

(ii)a transfer of assets to a relevant person,^F1F2

(ab)releases or writes off the whole or a part of—^F1F2

(i)a loan made to a relevant person, or^F1F2

(ii)an acquired right of the kind mentioned in paragraph (aa),”.^F1F2

(b)transfers an asset to a relevant person,^F1

(c)takes a step by virtue of which a relevant person acquires an asset within subsection (4),^F1

(d)makes available a sum of money or asset for use, or makes it available under an arrangement which permits its use—^F1

(i)as security for a loan made or to be made to a relevant person, or^F1

(ii)otherwise as security for the meeting of any liability, or the performance of any undertaking, which a relevant person has or will have, or^F1

(e)grants to a relevant person a lease of any premises the effective duration of which is likely to exceed 21 years.^F1

(2)In subsection (1) “relevant person”—^F1

(a)means A or a person chosen by A or within a class of person chosen by A, and^F1

(b)includes, if P is taking a step on A's behalf or otherwise at A's direction or request, any other person.^F1

(3)In subsection (2) references to A include references to any person linked with A.^F1

(3A)For the purposes of subsection (1) “loan” includes—^F1F3

(a)any form of credit, and^F1F3

(b)a payment that is purported to be made by way of a loan.^F1F3

(3B)Subsection (3C) applies where a person (“T”) acquires from another person (“L”) (whether or not for consideration)—^F1F3

(a)a right to payment of the whole or part of a loan where T is the person liable (at the time of the acquisition of the right) to repay the loan, or^F1F3

(b)a right to payment of a sum of money, or to a transfer of assets, where T is the person liable (at the time of the acquisition of the right) to pay the sum, or transfer the assets.^F1F3

(3C)L is to be treated for the purposes of subsection (1)(ab) as releasing—^F1F3

(a)in a case within subsection (3B)(a), the loan or the relevant part of it;^F1F3

(b)in a case within subsection (3B)(b), the right or the relevant part of it.^F1F3

(4)The following assets are within this subsection—^F1

(a)securities,^F1

(b)interests in securities, and^F1

(c)securities options,^F1

as defined in section 420 for the purposes of Chapters 1 to 5 of Part 7; and in subsection (1)(c) “acquires” is to be read in accordance with section 421B(2)(a).

(5)For the purposes of subsection (1)(d)—^F1

(a)references to making a sum of money or asset available are references to making it available in any way, however informal,^F1

(b)it does not matter if the relevant person has no legal right to have the sum of money or asset used as mentioned, and^F1

(c)it does not matter if the sum of money or asset is not actually used as mentioned.^F1

(6)Subsections (7) and (8) apply for the purpose of determining the likely effective duration of a lease of any premises granted to a relevant person (“the original lease”) for the purposes of subsection (1)(e).^F1

(7)If there are circumstances which make it likely that the original lease will be extended for any period, the effective duration of the original lease is to be determined on the assumption that the original lease will be so extended.^F1

(8)Further, if—^F1

(a)A is, or is likely to become, entitled to a later lease, or the grant of a later lease, of the same premises, or^F1

(b)it is otherwise likely that A will be granted a later lease of the same premises,^F1

the original lease is to be treated as continuing until the end of the later lease (and subsection (7) also applies for the purpose of determining the duration of the later lease).

(9)In subsection (8)—^F1

(a)references to A include references to—^F1

(i)any person linked with A, and^F1

(ii)the person to whom the original lease was granted where the original lease was not granted to A or any person linked with A, and^F1

(b)references to the same premises include references to any premises which include the whole or part of the same premises.^F1

(10)In this section “lease” and “premises” have the same meaning as they have in Chapter 4 of Part 3 of ITTOIA 2005.^F1