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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Other tax rules on corporate finance: stock loans and manufactured payments: overview

Stock loans and manufactured payments

Stock loans operate in a similar manner to sale and repurchase agreements (‘repos’) (CFM46000). They involve a temporary transfer of the legal ownership of securities, while the economic ownership is retained by the original owner. Interest or dividends received by the temporary owner are passed to the original owner in the form of ‘manufactured payments’.

Some of the tax rules applying to stock loans and manufactured payments are to be found outside the main body of the loan relationships rules in CTA09 or relate to chargeable gains or deduction of tax and hence lie within TCGA 1992 or ITA 2007.

The layout of the guidance

CFM74100 explains the commercial background and tax rules on stock loans.

CFM74300 explains the commercial background and tax rules on manufactured payments.