
1 

(1) This Order may be cited as the Alternative Finance (Income Tax, Capital Gains Tax and Corporation Tax) Order 2022.
(2) It comes into force on the day after the day on which it is made.
(3) The amendments made by this Order do not have effect in relation to arrangements entered into before 30th November 2021.
2 

(1) Section 564D of ITA 2007 (diminishing shared ownership arrangements) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (a), for “financial institution” substitute “person”, and
(b) after that paragraph insert—“
(aa) either—
(i) the first owner is a financial institution or a regulated home purchase plan provider, or
(ii) the arrangements are regulated electronic system facilitated arrangements,”.
(3) After that subsection insert—“
(1A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the enjoyment by the eventual owner of the rights referred to in subsection (1)(f) and (g) before the eventual owner’s acquisition of the first owner’s beneficial interest,
(b) the eventual owner would be regarded, for the purposes of that agreement, as the borrower under it,
(c) the first owner would be regarded, for the purposes of that agreement, as the lender under it, and
(d) those owners becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of FISMA 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) After subsection (6) insert—“
(7) In this section—
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order;
 “regulated home purchase plan provider” means a person who—
(a) is carrying on the regulated activity specified in article 63F(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (entering into regulated home purchase plans as home purchase provider), and
(b) has permission under Part 4A of FISMA 2000 to do so.”.
3 

(1) Section 151K of TCGA 1992 (diminishing shared ownership arrangements) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (a), for “financial institution” substitute “person”, and
(b) after that paragraph insert—“
(aa) either—
(i) the first owner is a financial institution or a regulated home purchase plan provider, or
(ii) the arrangements are regulated electronic system facilitated arrangements,”.
(3) After that subsection insert—“
(1A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the enjoyment by the eventual owner of the rights referred to in subsection (1)(f) and (g) before the eventual owner’s acquisition of the first owner’s beneficial interest,
(b) the eventual owner would be regarded, for the purposes of that agreement, as the borrower under it,
(c) the first owner would be regarded, for the purposes of that agreement, as the lender under it,
(d) those owners becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) After subsection (7) insert—“
(8) In this section—
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order;
 “regulated home purchase plan provider” means a person who—
(a) is carrying on the regulated activity specified in article 63F(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (entering into regulated home purchase plans as home purchase provider), and
(b) has permission under Part 4A of the Financial Services and Markets Act 2000 to do so.”.
4 

(1) Section 504 of CTA 2009 (diminishing shared ownership arrangements) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (a), for “financial institution” substitute “person”, and
(b) after that paragraph insert—“
(aa) either—
(i) the first owner is a financial institution or a regulated home purchase plan provider, or
(ii) the arrangements are regulated electronic system facilitated arrangements,”.
(3) After that subsection insert—“
(1A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the enjoyment by the eventual owner of the rights referred to in subsection (1)(f) and (g) before the eventual owner’s acquisition of the first owner’s beneficial interest,
(b) the eventual owner would be regarded, for the purposes of that agreement, as the borrower under it,
(c) the first owner would be regarded, for the purposes of that agreement, as the lender under it, and
(d) those owners becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of FISMA 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) After subsection (6) insert—“
(7) In this section—
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order;
 “regulated home purchase plan provider” means a person who—
(a) is carrying on the regulated activity specified in article 63F(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (entering into regulated home purchase plans as home purchase provider), and
(b) has permission under Part 4A of FISMA 2000 to do so.”.
5 

(1) Section 564C of ITA 2007 (purchase and resale arrangements) is amended as follows.
(2) In subsection (1)(a) for “one or both of whom are financial institutions, and” substitute—“and—
(i) at least one of those persons is a financial institution, or
(ii) the arrangements are regulated electronic system facilitated arrangements, and”.
(3) After subsection (2) insert—“
(2A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the deferral of the payment of all or part of the second purchase price,
(b) the first purchaser would be regarded, for the purposes of that agreement, as the lender under it,
(c) the second purchaser would be regarded, for the purposes of that agreement, as the borrower under it, and
(d) those purchasers becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of FISMA 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) In subsection (3)—
(a) omit the “and” after the definition of “the first purchase price”, and
(b) after the definition of “the second purchase price” insert—“
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order.”.
6 

(1) Section 151J of TCGA 1992 (purchase and resale arrangements) is amended as follows.
(2) In subsection (1)(a) for “one or both of whom are financial institutions, and” substitute—“and—
(i) at least one of those persons is a financial institution, or
(ii) the arrangements are regulated electronic system facilitated arrangements, and”.
(3) After subsection (2) insert—“
(2A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the deferral of the payment of all or part of the second purchase price,
(b) the first purchaser would be regarded, for the purposes of that agreement, as the lender under it,
(c) the second purchaser would be regarded, for the purposes of that agreement, as the borrower under it, and
(d) those purchasers becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) In subsection (3)—
(a) omit the “and” after the definition of “the first purchase price”, and
(b) after the definition of “the second purchase price” insert—“
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order.”.
7 

(1) Section 503 of CTA 2009 (purchase and resale arrangements) is amended as follows.
(2) In subsection (1)(a) for “one or both of whom are financial institutions, and” substitute—“and—
(i) at least one of those persons is a financial institution, or
(ii) the arrangements are regulated electronic system facilitated arrangements, and”.
(3) After subsection (2) insert—“
(2A) Arrangements are regulated electronic system facilitated arrangements if—
(a) the arrangements substantially consist of an article 36H agreement in relation to the deferral of the payment of all or part of the second purchase price,
(b) the first purchaser would be regarded, for the purposes of that agreement, as the lender under it,
(c) the second purchaser would be regarded, for the purposes of that agreement, as the borrower under it, and
(d) those purchasers becoming parties to the agreement was facilitated by an electronic system operated by a person who has permission under Part 4A of FISMA 2000 to carry on, in relation to that system, the regulated activity specified in article 36H(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (operating an electronic system in relation to lending).”.
(4) In subsection (3)—
(a) omit the “and” after the definition of “the first purchase price”, and
(b) after the definition of “the second purchase price” insert—“
 “article 36H agreement” has the meaning given by article 36H(4) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and
 “borrower” and “lender” are to be construed in accordance with article 36H(9) of that Order.”.
8 

(1) In section 151H of TCGA 1992 (introduction to Chapter 4 of Part 4 of that Act), in subsection (1), omit “with financial institutions”.
(2) In section 151R of that Act (diminishing shared ownership arrangements), in subsection (2)—
(a) for “institution” substitute “first owner”, and
(b) for “institution’s” substitute “first owner’s”.
(3) In section 173A of ITEPA 2003 (alternative finance arrangements)—
(a) in subsection (3)(b), for “financial institution’s” substitute “first owner’s”,
(b) in subsection (3)(c), for “financial institution” substitute “first owner”, and
(c) in subsection (4)—
(i) omit the “and” after the definition of “alternative finance return”, and
(ii) after the definition of “financial institution” insert—“
 , and
 “first owner” is to be construed in accordance with section 564D of ITA 2007 or section 504 of CTA 2009.”.
(4) In section 564A of ITA 2007 (introduction to Part 10A of that Act), in subsection (1)(a), omit “with financial institutions”.
(5) In section 564K of that Act (diminishing shared ownership arrangements), in subsection (2)—
(a) for “institution” substitute “first owner”, and
(b) for “institution’s” substitute “first owner’s”.
(6) In section 501 of CTA 2009 (introduction to Chapter 6 of Part 6 of that Act), in subsection (1), omit “between companies and financial institutions”.
(7) In section 512 of that Act (diminishing shared ownership arrangements), in subsection (2)—
(a) for “institution” substitute “first owner”, and
(b) for “institution’s” substitute “first owner’s”.
Alan Mak
Gareth Johnson
Two of the Lords Commissioners of Her Majesty’s Treasury
23rd May 2022