Section 467 | Holdings of debt and equity in same proportions

(1)This section applies at any time where—

(a)persons have lent money to another person (“U”),

(b)the lenders also have shares or voting power in U,

(c)the amounts each of the lenders has lent stand in the same, or substantially the same, proportion as the shares or voting power in U that each of them has, and

(d)for the purposes of section 464 the lenders (taken together) have a 25% investment in U.

(2)The lenders are treated for the purposes of this Part as if, in relation to the loans (and anything done under or for the purposes of them), they were related parties of U at that time (so far as that would not otherwise be the case).

(3)If—

(a)some or all of the rights under the loan are transferred, and

(b)the transferred rights are held by, or for the benefit of, another person (“the transferee”) at any time,

the transferee is treated for the purposes of this Part as if, in relation to the loan (and anything done under or for the purposes of it), the transferee were a related party of U at that time (so far as that would not otherwise be the case).

(4)This applies whether or not the transferee has any shares or voting power in U.

(5)For the purposes of this section references to shares in U include shares in U that may be held as a result of the exercise of any right or power and include rights or interests in U that are of a similar character to shares.

(6)This section applies (with any necessary modifications) in relation to any other financial liability owed to, or any transaction with, U as it applies to loans made to U.