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HMRC internal manual

Savings and Investment Manual

Disguised interest: what are 'arrangements'?

Disguised interest ‘arrangements’

The term ‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable.

This is a wide-ranging definition that is intended to capture any type of arrangement under which disguised interest type returns could be obtained.

In deciding whether or not an agreement, transaction, etc, forms part of an arrangement, regard can be had to the circumstances in which it was entered into, its likely effect and other factors. There is no requirement that the components of the arrangement must be entered into at the same time. Arrangements will often, but not necessarily, involve a number of parties.

The term is not limited to contrived, artificial, transitory, pre-ordained or commercially unnecessary steps or transactions of the sort commonly found in avoidance schemes.