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267NInterpretation.

(1) For the purpose of this Part—

“asset” has the same meaning as in section 532;

“charges on income” has the same meaning as in section 243;

“credit return” means—

(a) in the case of a credit transaction within the meaning of paragraph (a) or (b) of the definition of “credit transaction”, the excess of the consideration accruing to the finance undertaking from the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for that asset, and

(b) in the case of a credit transaction within the meaning of paragraph (c) of the definition of “credit transaction”, the excess of the consideration (including any consideration paid or payable for the use of the asset during the period of the arrangement) accruing to the finance undertaking from the borrower in respect of the interest of the finance undertaking in the asset over the consideration paid or payable by the finance undertaking for that asset;

“credit transaction” means—

(a) an arrangement whereby a finance undertaking acquires an asset for the purpose of disposing of the full interest in that asset to a borrower in circumstances where—

(i) the consideration paid or payable by the borrower exceeds the consideration paid or payable by the finance undertaking for the asset,

(ii) all or part of that consideration is not required to be paid until a date later than the date of the disposal, and

(iii) the excess of the consideration paid or payable to the finance undertaking by the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest,

(b) an arrangement whereby a finance undertaking acquires an asset and—

(i) immediately disposes of its full interest in that asset to a borrower for a consideration which exceeds the consideration paid or payable by the finance undertaking for the asset,

(ii) the borrower acquires and immediately disposes of the full interest in that asset to another person for a consideration which is at least 95 per cent of the consideration paid or payable by the finance undertaking for the acquisition of that asset,

(iii) all or part of the consideration for the acquisition of the asset by the borrower is not required to be paid by the borrower until a date later than the date of the purchase of the asset, and

(iv) the excess of the consideration paid or payable to the finance undertaking by the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest,

or

(c) an arrangement whereby—

(i) a finance undertaking and a borrower jointly acquire an asset, or

(ii) a finance undertaking acquires an interest in an asset from a borrower, in circumstances where the borrower retains an interest in that asset,

on terms whereby—

(I) the borrower—

(A) in the circumstances referred to in subparagraph (i) has exclusive use of the asset immediately and, in the circumstances referred to in subparagraph (ii), retains exclusive use of the asset immediately, as the case may be,

(B) is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including any increase in the value of the asset), and

(C) agrees to make payments to the finance undertaking amounting to the aggregate of the consideration paid or payable by the finance undertaking for the acquisition of its interest in the asset and any consideration paid or payable by the borrower for the use of the asset during the period of the arrangement,

(II) the excess of the consideration (including any consideration paid or payable for the use of the asset during the period of the arrangement) accruing to the finance undertaking from the borrower in respect of the interest of the finance undertaking in the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest, and

(III) the finance undertaking’s interest in the asset passes either immediately or by the end of a specified period of time, to the borrower for a consideration which exceeds the consideration paid by the finance undertaking for the asset;

“deposit transaction” means a transaction whereby—

(a) a person deposits a sum of money with a relevant deposit taker on terms under which it or any part of it may be repaid, either on demand or at a time or in circumstances agreed by or on behalf of the person making the deposit and the relevant deposit taker,

(b) the relevant deposit taker makes or credits a payment or a series of payments (in this Part referred to as the “deposit return”) over a period of time to the person—

(i) out of any profit resulting from the use of that money, and

(ii) in proportion to the money deposited by the person;

“financial institution” has the same meaning as in section 891B;

“finance undertaking” means a finance company or a financial institution;

“investment certificate” means a security which—

(a) is issued by a qualifying company to a person in order to establish the claim of that person over the rights and obligations represented by the certificate,

(b) entitles the owner to an amount equivalent to a share in the profits or losses derived from an asset held by the qualifying company which issued the certificate, in proportion to the number and value of the certificates owned,

(d) is wholly or partly treated in accordance with generally accepted accounting practice as a financial liability of the qualifying company which issued the certificate;

“investment return” means—

(a) the excess (if any) of the consideration paid by the qualifying company on redemption of an investment certificate over the consideration paid in respect of that certificate by the beneficial owner to whom the certificate was first issued, and

(b) any other payments (if any) made from time to time by the qualifying company to the beneficial owner from profits or gains derived by the qualifying company from the asset and in consideration of the holding of the investment certificate;

“investment transaction” means a transaction whereby a person acquires investment certificates and receives an investment return;

“loan” means any loan or advance or any other arrangement whatever by virtue of which an amount equivalent to interest is paid or payable;

“owner”, in relation to any security, means at any time the person who would be entitled, if the securities were redeemed at that time by the issuer, to the proceeds of the redemption, and “owned” shall be construed accordingly;

“public” means individuals generally, companies generally, or individuals and companies generally;

“qualifying company” means a company which—

(a) is resident in the State,

(b) issues investment certificates to investors, and

(c) redeems the investment certificates after a specified period of time;

“relevant deposit”, “relevant deposit taker” and “relevant interest” have, respectively, the meanings assigned to them by section 256;

“specified financial transaction” means—

(a) a credit transaction,

(b) a deposit transaction, or

(c) an investment transaction,

but a transaction shall not be a specified financial transaction if the terms of the transaction are not such as would reasonably have been expected if the parties to the transaction were independent persons acting at arm’s length.

(2) Any reference in this Part to consideration—

(a) paid or payable by a borrower or a finance undertaking shall be construed as a reference to the aggregate of amounts paid or payable by the borrower or finance undertaking, as the case may be,

(b) shall not include any amount in respect of which a borrower or a finance undertaking may claim—

(i) a deduction under Chapter 1 of Part 8 of the Value-Added Tax Consolidation Act 2010, or

(ii) a refund of value-added tax under an order under section 103 of that Act,

and

(c) shall not include any amount chargeable by a finance undertaking in respect of fees, charges or similar payments.

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