CFM44010 - Deemed loan relationships: alternative finance: overview
Overview
Chapter 6 of Part 6 CTA09 treats arrangements that comply with Shari바카라 사이트™a law as falling within the loan relationships regime. These rules are not limited to Shari바카라 사이트™a compliant products but also apply to any finance arrangement that falls within their terms.
The rules in CTA09/PT6/CH6 refer to 바카라 사이트˜alternative finance arrangements바카라 사이트™, and provide, broadly, a level playing field for tax purpose between conventional financial arrangements and ones that are differently structured but give an economically equivalent return. See CFM11120 for more on Shari바카라 사이트™a compliant financial arrangements.
Shari바카라 사이트™a law prohibits transactions that involve interest, and arrangements for the borrowing or lending of money will usually involve some form of risk sharing instead. The return from many such arrangements is economically equivalent to interest. Where the arrangements meet certain conditions, the tax rules provide for the return from the arrangements to be taxed as interest in the hands of a taxpayer subject to income tax rules (see the Savings and Investment Manual SAIM2000), and as loan relationships credits and debits for a corporate taxpayer.
The rules do not change the nature of the financial arrangements, or impute interest, or deem interest to arise where there is none.
The return is known as 바카라 사이트˜alternative finance return바카라 사이트™. The original legislation in FA 2005 (CFM44020) referred to 바카라 사이트˜alternative finance return바카라 사이트™ and 바카라 사이트˜profit share return바카라 사이트™ but this was a difference in terminology only. The amounts were treated the same for CT purposes - as amounts paid or received that are economically equivalent to interest.