Commentary

A1.305 Further provision concerning the treatment of alternative finance arrangements

Administration and compliance

A1.305 Further provision concerning the treatment of alternative finance arrangements

A1.305 Further provision concerning the treatment of alternative finance arrangements

The provisions described here ensure that various provisions that apply to interest will also apply to returns taxed by the measures described in this Division. For the purposes of these provisions, 'relevant arrangements' were originally defined as alternative finance arrangements where the financial institution pays the alternative finance return or profit share return1. As stated in A1.303, the rewritten provisions do not use the term profit share return.

For periods before 31 March 2012, the reporting rules in TMA 1970, ss 17, 18 (see A4.120) were applied to alternative finance arrangements as if alternative finance return or profit share return were interest2. These provisions were replaced with new data-gathering powers under FA 2011, Sch 23, see A6.325–A6.345.

The rules for deduction of tax at source in ITA 2007, Pt 15 (ss 847–987) (see Division A4.4) are applied as if the alternative finance return or profit share return were interest3, and this creates an obligation to withhold income tax. For 2016/17 and subsequent years,

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