Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Computation: IT: alternative finance arrangements

FA05/S53

FA05 and FA06 introduced legislation on alternative finance arrangements. Analternative finance arrangement can be used in place of a conventional loan or mortgage orto provide a return to a customer depositing money in a bank. Although the arrangementsare constructed so as not to involve interest, returns under alternative financearrangements may be treated for UK tax purposes as if they were interest. More detail canbe found at BIM45780+ and at CFM6051+.

Arrangements addressed by Section 47 FA05: “Alternative finance arrangements:purchase and sale” and Section 47A FA05 (inserted by Section96 FA06):”Alternative finance arrangements: diminishing shared ownership” each rest onthe sale and purchase of an asset.

Except where the consideration for a purchase or sale of an asset is to be taken to be anamount other than the actual consideration, the effective or alternative finance return asdefined in Sections 47 and 47A is to be excluded for the purposes of TCGA 1992 from theconsideration for the sale and purchase of the asset.