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Companies

Purchase and re-sale arrangement/Diminishing shared ownership arrangement

Where a company is a party to a purchase and resale arrangement or a diminishing shared ownership arrangement within the provisions described in B5.602A, the loan relationships regime has effect in relation to the arrangements as if the:

1. Ìý

   •ÌýÌýÌýÌý arrangements were a loan relationship to which the company is a party

2. Ìý

   •ÌýÌýÌýÌý amount of the purchase price of the asset were the amount of a loan made to the company by, or by the company to, the other party to the arrangements, and

3. Ìý

   •ÌýÌýÌýÌý alternative finance return payable to or by the company under the arrangements were interest payable under that loan relationship¹

For a corporate vendor, it is instructive to contrast a sale by a financial institution (or post May 2022 the arrangements being regulated electronic system facilitated arrangements) falling within the purchase and resale rules described in B5.602A with a sale on