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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Loan relationships: deemed loan relationships: overview

Relationships treated as loan relationships: overview

CTA09/S302 defines a loan relationship as a money debt, that arises from a transaction for the lending of money.

Certain types of financial arrangements, and the rights and payments made under those arrangements, do not fall within this definition, but are nevertheless brought within the loan relationship rules by CTA09/PT6.

Part 6 refers to these as ‘relationships treated as loan relationships’. For convenience, in the Corporate Finance Manual we refer to these as ‘deemed loan relationships’. Broadly, these ‘deemed loan relationships’ fall into three categories.

  • ‘Money debts’ that do not ‘arise from the lending of money’ (Chapter 2 of Part 6 CFM40120.)
  • Investments in certain types of investment fund and mutual arrangement (Chapters 3 to 5 of Part 6 CFM40130.)
  • Arrangements that give an interest-like return (Chapters 2A and 6 to 11 CFM40140.)

In each case the legislation provides for the rules in CTA09/PT5 to apply to these ‘deemed loan relationships’ as if they are loan relationships, and CTA09/S294(2) provides generally that references to ‘Part 5’ in the Tax Acts includes references to ‘Part 6’.