{
  "url": "https://openlegislation.uk/financing-arrangement-funded-transfers-to-shareholders-regulations-2008/note",
  "json_url": "https://openlegislation.uk/financing-arrangement-funded-transfers-to-shareholders-regulations-2008/note.json",
  "legislation": "uksi/2008/1926",
  "legislation_title": "The Financing-Arrangement-Funded Transfers to Shareholders Regulations 2008",
  "legislation_url": "https://openlegislation.uk/financing-arrangement-funded-transfers-to-shareholders-regulations-2008",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Regulations)\nSections 83YC and 83YD of the Finance Act 1989 (inserted by paragraph 1(3) of Schedule 17 to the Finance Act 2008) provide a revised tax treatment for a type of financing arrangement where a loan or advance made to an insurance company or a financial reinsurance arrangement made by an insurance company has the initial effect of increasing the company’s surplus which is used to make a transfer to the shareholders of the company. This type of transfer is known as a “financing-arrangement-funded transfer to shareholders”, sometimes abbreviated to “FAFTS”. The new section 83YC imposes a charge to tax if an insurance company makes a FAFTS in relation to a non-profit fund; and the new section 83YD provides for corresponding adjustments to be made if a loan or advance is repaid or if liabilities reinsured under a financial reinsurance arrangement are recaptured.\nIt is not possible to use the existing allocation rules in the Corporation Tax Acts to attribute tax charges under section 83YC or tax deductions under section 83YD. These Regulations accordingly provide rules in all cases where more than one category of business is involved. Regulations 3 to 8 contain rules relating to the treatment of amounts arising under subsection (3) of section 83YC; and regulations 9 to 14 contain rules relating to the treatment of amounts arising under subsection (2) of section 83YD.\nThese Regulations have effect in relation to periods of account beginning on or after 1st January 2008: and are accordingly capable of having retrospective effect in certain circumstances. Authority for the retrospective effect made by these Regulations is conferred by section 83YE(4) of the Finance Act 1989 (also inserted by paragraph 1(3) of Schedule 17 to the Finance Act 2008).\nA full and final Impact Assessment has not been produced for this instrument as a negligible impact on the private or voluntary sectors is foreseen.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/2008/1926/note",
    "retrieved_at": "2026-10-29T03:26:59.306276+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}