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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Other tax rules on corporate debt: transfers of income streams: non-corporate transferors: financial traders

Non-corporate transferors: financial traders

For non-corporate transferors for whom the relevant receipts would have been taxed as trading income or income from a property business, the provisions at ITA07/S809AZB(4) and (5) mirror those at CTA10/S757(3).

Where consideration is the measure of the income, it is treated as arising when it is recognised in the transferor’s profit and loss account or income statement in accordance with GAAP. Where market value is used, the excess over the consideration is treated as arising at the same time that it would have been recognised if consideration equal to full market value had been received.

Where the transferor is a company within the charge to income tax and these rules would not involve full recognition of the income, the amount that would not be recognised is to be treated as arising at the time that it becomes apparent that not all the income would be recognised in an accounting period of the company. This mirrors S753(4).