382. Disguised interest.

Where a company is party to an arrangement1 which produces for the company a return in relation to any amount which is economically equivalent to interest, Part 5 of the Corporation Tax Act 20092 applies as if the return were a profit arising to the company from a loan relationship3.

For these purposes, a return produced for a company by an arrangement in relation to any amount is 'economically equivalent to interest' if (and only if):


    (1)     it is reasonable to assume that it is a return by reference to the time value of that amount of money;