IFM04180 - Property authorised investment funds (PAIFs): introduction and conditions of membership for the regime: the loan creditor condition
This condition (69M SI 2006/964) restricts the way in which a PAIF can borrow money. The purpose is to prevent income or capital growth being extracted from the PAIF via a profit-related loan. The PAIF will be in breach of this condition if it is the debtor in a loan which is not a normal commercial loan.
The wording in the legislation is similar to the definition of 鈥榥ormal commercial loan鈥� in section 162 of the Corporation Tax Act 2010. For more guidance see CTM81010 and CTM81020.