An income tax charge is imposed on 'disguised interest'1. This does not apply where arrangements pre-date 6 April 2013 and neither the rules relating to guaranteed returns from futures and options nor those relating to manufactured interest applied2. The charge also does not apply if the disguised interest is chargeable to income tax under another provision, or would be but for an exemption. However, it takes precedence over charges to other taxes, the legislation permitting just and reasonable adjustments to be made in respect of that other tax, notwithstanding any time limits, in order to avoid any double taxation3.
For this purpose, disguised
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