CFM73260 - Other tax rules on corporate finance: structured finance: Section 785A and sections 758 to 769
Interaction with section 785A
CTA10/S758 and S769 take priority over ICTA88/S785A (see the guidance on rent factoring at CTM36630). Section 785A applies to any assignment of the rights to receive plant & machinery rentals and treats the whole amount of the consideration as income to the extent it is not already so treated. But unlike the structured finance rules, section 785A does not require the advance to be treated as a financial liability. Accordingly, if the assignment consideration for the plant and machinery rentals is accounted for as a loan, section 758 etc will apply; if it is not, section 785A will apply.