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Finance Act 2004

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This is the original version (as it was originally enacted).

Finance Act 1996

Loan relationships: introductory

5Schedule 9 to the Finance Act 1996 (c. 8) (loan relationships: special computational provisions) is amended as follows.

Transactions not at arm’s length

6(1)Paragraph 11 is amended as follows.

(2)In sub-paragraph (1) (which is expressed to be subject to sub-paragraphs (2) to (3A)) for “(2)” substitute “(1A)”.

(3)After sub-paragraph (1) insert—

(1A)Notwithstanding section 80(5) of this Act, sub-paragraph (1) above shall not apply to debits or credits in respect of amounts which—

(a)fall to be adjusted for tax purposes under Schedule 28AA to the Taxes Act 1988 (provision not at arm’s length), or

(b)fall within that Schedule without falling to be so adjusted.

(1B)For the purposes of sub-paragraph (1A) above, an amount falls within Schedule 28AA to the Taxes Act 1988 without falling to be adjusted under that Schedule in a case where—

(a)the conditions in paragraph 1(1) of that Schedule are met, and

(b)the actual provision does not differ from the arm’s length provision..

Continuity of treatment: groups etc.

7(1)Paragraph 12 is amended as follows.

(2)After sub-paragraph (2) insert—

(2ZA)Where the debits or credits to be brought into account for the purposes of this Chapter in respect of any amounts fall to be determined in accordance with sub-paragraph (2) above, Schedule 28AA to the Taxes Act 1988 (provision not at arm’s length) does not apply in relation to those amounts..

Amounts imputed under Schedule 28AA to the Taxes Act 1988

8For paragraph 16 (imputed interest) substitute—

Amounts imputed under Schedule 28AA to the Taxes Act 1988

16(1)This paragraph applies where, in pursuance of Schedule 28AA to the Taxes Act 1988 (provision not at arm’s length), an amount falls to be treated as any of the following—

(a)an amount of profits, gains or losses (whether or not of a capital nature) arising to a company from any of its loan relationships or related transactions;

(b)interest payable under any of a company’s loan relationships;

(c)charges or expenses incurred by a company under or for the purposes of any of its loan relationships or related transactions.

(2)That Schedule shall have effect, notwithstanding the provisions of any authorised accounting method, so as to require credits or debits relating to the amount so treated to be brought into account for the purposes of this Chapter to the same extent as they would be in the case of an actual amount of—

(a)profits, gains or losses (whether or not of a capital nature) arising to the company from the loan relationship or related transaction,

(b)interest accruing or becoming due and payable under the loan relationship, or

(c)charges or expenses incurred under or for the purposes of the loan relationship or related transaction,

as the case may be..

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