Section 809BZC | Payments treated as borrower's income ^F1

(1)This section applies if—

(a)a type 1 finance arrangement would not have the relevant effect (ignoring section 809BZB(2)),

(b)that arrangement would not have the corresponding corporation-tax effect (ignoring section 759(2) of CTA 2010), and

(c)the borrower is—

(i)within the charge to income tax, or

(ii)a partnership at least one member of which is within the charge to income tax.

(2)The payments mentioned in section 809BZA(2)(c) must be treated for income tax purposes as income of the borrower payable in respect of the security.

(3)Subsection (2) applies whether or not the payments are also the income of another person for tax purposes.

(4)Subsections (3) to (6) of section 809BZB (meaning of relevant effect) apply for the purposes of this section as for those of that.

(5)In subsection (1)(b) “the corresponding corporation-tax effect” means the relevant effect as defined by section 759(3) to (6) of CTA 2010 (provision for corporation tax corresponding to section 809BZB(3) to (6)).