C11C2C12C9C5C7C1C6C3C4C8Part 5Loan Relationships

Annotations:
Modifications etc. (not altering text)
C11

Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)

C2

Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)

C12

Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)

C5

Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

C1

Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)

C6

Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)

C3

Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)

C4

Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))

C8

Pt. 5 modified by 2010 c. 4, s. 676AG(1) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 75)

C10C2C5Chapter 6Connected companies relationships: impairment losses and releases of debts

Annotations:
Modifications etc. (not altering text)
C10

Pt. 5 Chs. 6-8 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)

Deemed debt releases on impaired debts becoming held by connected company

361C5Acquisition of creditor rights by connected company at undervalue

1

This section applies if—

C13a

a company (“D”) is a party to a loan relationship as debtor,

C13b

another company (“C”) becomes a party to it as creditor,

C13c

immediately after it does so C and D are connected,

d

in a case where the person from whom C acquires its rights under the loan relationship is a company, in the period of account in which C acquires them there is no connection between C and that company,

e

the amount or value of any consideration given by C for the acquisition is less than the pre-acquisition carrying value (see subsection (5)), and

F2f

the equity-for-debt exception (see section 361C) does not apply.

F32

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

C is treated as releasing its rights under the loan relationship when it acquires them.

4

The amount treated as released is the amount of the difference referred to in subsection (1)(e).

5

In subsection (1)(e) “the pre-acquisition carrying value” means the amount which would be the carrying value of the liability under the loan relationship in D's accounts if a period of account had ended immediately before C became a party to it.

6

For the purposes of subsection (5) the carrying value is determined taking no account of—

a

accrued amounts, or

b

amounts paid or received in advance.

F17

Subsections (3) and (4) are subject to section 361D (corporate rescue: debt released shortly after acquisition).