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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate finance: structured finance: consequences for the lender

No consequences for the lender

As indicated at CFM73100, the rules in sections 759 and 760 have no consequence for and no effect on the lender. Cases where these provisions are expected to apply will normally involve lenders which are banks within the charge to corporation tax (so the transactions are already likely to be taxed as lending transactions on a substance over form basis) or are non-resident entities or otherwise exempt from UK tax. There may be investment companies as ‘lenders’ but they are likely to be taxed on the basis of a discounting transaction which also means they are chargeable only on the interest element in their receipts.