Taxation (International and Other Provisions) Act 2010 section 110

Stock-lending cases in which no disregard under section 108

Section 110 removes the benefit of the section 108 disregard for certain tax on loan relationship interest where the company has lent out the underlying securities under a stock lending arrangement.

• This section creates an exception to the section 108 disregard specifically for stock lending situations involving loan relationships.
• Tax on interest from a loan relationship falls within this exception where the company has transferred the securities under a stock lending arrangement and has therefore ceased to be a party to the loan relationship.
• The interest must accrue during the period the stock lending arrangement is in effect — that is, from the initial transfer of securities until either the securities are returned or it becomes clear they will not be returned.
• The key definitions — "initial transfer" and "stock lending arrangement" — take their meaning from section 263B of the Taxation of Chargeable Gains Act 1992.