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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate finance: structured finance: summary of the relevant effects

A summary of the relevant effects

The consequence of the application of sections 759 and 760 is that the borrower (including the members of a partnership) continues to be charged to tax as if the transaction was in form as well as in substance a loan, so that the transfer of the asset is treated as merely by way of security and the income from the security continues to be taxed on the borrower or, where the borrower is a partnership, the members.

Exception to the relevant effect: when SS759 does not apply

There are a number of cases where section 759 is prevented from applying, generally because the income is brought into account for tax purposes by some other mechanism. These are set out in section 771 and considered at CFM73250.