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Finance Act 2012


1.Section 23 modifies the corporation tax rules on loan relationships that apply when the parties to a loan relationship become connected. The section changes the circumstances in which companies that become connected with pre-existing debt bring in a deemed release in respect of that debt,  and the calculation of the amount of  that deemed release. It inserts a new anti-avoidance rule to ensure that the existing rules relating to deemed releases cannot be circumvented. It also inserts a retrospective provision in relation to particular arrangements circumventing  the  existing  rules  where  a  company  becomes  creditor to a loan relationship on or after 1 December 2011 and before 27 February 2012.

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