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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate finance: structured finance: commencement and transition


The structured finance arrangement legislation was announced on 6 June 2006 and applies generally from that date. FA06/SCH6/PARA6 (2) to (7) deal with commencement.

For the purpose of structured finance arrangement rules it is irrelevant that any transfer of the security took place before the announcement of the legislation on 6 June 2006, but sub-paragraph (3) goes on to provide that the effect of section 758 and 765 is only to charge to tax or bring income into account or deny relief for deductions so far as it arises on or after 6th June. ‘Arise’ in this context means arise for accounts purposes.

Sub-paragraph (4) deals with the repeal of the rent-factoring legislation. That legislation is repealed in relation to transactions entered into on or after 6th June 2006 but sub-paragraph (4) preserves the rent-factoring legislation in its application to transactions entered into before that date and provides that nothing in sections 758 to 769 has effect on a rent-factoring arrangement within sections 43A to 43G ICTA.

Transition: opening value of deemed loan relationship

Sub-paragraphs (5) to (7) of paragraph 6 of Schedule 6 FA 2006 deal with the loan relationships consequences where a pre-existing arrangement is treated as a loan relationship by the FA 2006 structured finance arrangements legislation. A period of account for the purposes of Part 6 CTA 2009 is treated as beginning on 6th June 2006. The loan relationship itself is treated as having been entered into for a consideration equal to its notional carrying value which is defined as the amount which would have been the carrying value in the accounts (carrying value with the meaning it has for CTA09/S317 if a period of account had ended immediately before the 6th June - see CFM34040.