CFM17540 - Repos: FA 2007 rules for companies: second tax consequence for creditor repos and creditor quasi-repos

This guidance describes the corporation tax treatment of sale and repurchase arrangements (“repos”) where the initial sale of securities takes place on or after 1 October 2007

Creditor repos and creditor quasi-repos: second tax consequence (Paragraph 10 Schedule 13 FA 2007)

The second tax consequence for creditor repos and creditor quasi-repos is that the whole arrangement is treated as a loan relationship, and that any finance return reflected in the accounts in accordance with GAAP is treated as interest on that loan relationship. This rule corresponds to the rule for debtor repos and debtor quasi-repos in paragraph 5 Schedule 13 FA 2007 ( CFM17520+).