Special casesU.K.
F192Convertible securities etc: creditor relationshipsU.K.
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Textual Amendments
F1S. 92 repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 9, Sch. 42 Pt. 2(6)
Modifications etc. (not altering text)
C1S. 92 modified (27.7.1999) by 1999 c. 16, s. 65(9)
F292A Convertible securities etc: debtor relationshipsU.K.
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Textual Amendments
F2S. 92A repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 10, Sch. 42 Pt. 2(6)
F393 Relationships linked to the value of chargeable assets.U.K.
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Textual Amendments
F3S. 93 repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 11, Sch. 42 Pt. 2(6)
F493A Relationships linked to the value of chargeable assets: guaranteed returnsU.K.
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Textual Amendments
F4S. 93A repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 11, Sch. 42 Pt. 2(6)
F593B Loan relationships ceasing to be within section 93U.K.
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Textual Amendments
F5S. 93B repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 11, Sch. 42 Pt. 2(6)
94 Indexed gilt-edged securities.U.K.
[F6[F7(1)In the case of a loan relationship represented by an index-linked gilt-edged security—
(a)the amounts to be brought into account for the purposes of this Chapter must be determined using fair value accounting, and
(b)the following adjustment shall be made in computing those amounts.
(2)The adjustment shall be made wherever—
(a)those amounts fall to be determined by reference to the value of the security at two different times, and
(b)there is a change in the retail prices index between those times.
(3)The adjustment is made to the carrying value of the security at the earlier time and is to increase or, as the case may be, reduce it by the same percentage as the percentage increase or reduction in the retail prices index between the earlier and the later time.]
(4)The Treasury may, in relation to any description of index-linked gilt-edged securities, by order provide that—
(a)there are to be no adjustments under this section; or
(b)that an adjustment specified in the order (instead of the adjustment specified in subsection (3) above) is to be the adjustment for which this section provides.
(5)An order under subsection (4) above—
(a)shall not have effect in relation to any gilt-edged security issued before the making of the order; but
(b)may make different provision for different descriptions of securities.
(6)For the purposes of this section the percentage increase or reduction in the retail prices index between any two times shall be determined by reference to the difference between—
(a)that index for the month in which the earlier time falls; and
(b)that index for the month in which the later time falls
[F8except that where the earlier time falls at the beginning of an accounting period which begins with the first day of a month, the index for the previous month shall be used for the purposes of paragraph (a) above.]
(7)In this section “index-linked gilt-edged securities” means any gilt-edged securities the amounts of the payments under which are determined wholly or partly by reference to the retail prices index.]
Textual Amendments
F6S. 94 repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 12, Sch. 42 Pt. 2(6)
F7S. 94(1)-(3) substituted for s. 94(1)-(3A) (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 27(3)
F8Words in s. 94(6) inserted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 12(3)
Modifications etc. (not altering text)
C2Pt. 4 Ch. 2 modified (with effect in accordance with s. 56(1)-(3)(5) of the amending Act) by Finance Act 2005 (c. 7), s. 56(4)(b)
C3Pt. 4 Ch. 2 modified (with effect in accordance with s. 56 of the amending Act) by Finance Act 2005 (c. 7), s. 50
C4S. 94 restored (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 27(1)
[F994ALoan relationships with embedded derivativesU.K.
(1)This section applies where a company [F10in accordance with generally accepted accounting practice treats] the rights and liabilities under a loan relationship to which it is party (whether as debtor or creditor) as divided between—
(a)rights and liabilities under a loan relationship (the “host contract”), and
(b)rights and liabilities under one or more derivative financial instruments or equity instruments (“embedded derivatives”).
(2)The company shall be treated—
(a)for the purposes of this Chapter as party to a loan relationship whose rights and liabilities consist only of the rights and liabilities of the host contract, and
(b)for the purposes of Schedule 26 to the Finance Act 2002 (derivative contracts) as—
(i)party to a relevant contract within the meaning of that Schedule whose rights and liabilities consist only of those of the embedded derivative, or
(ii)if there is more than one embedded derivative, party to relevant contracts within the meaning of that Schedule each of whose rights and liabilities consist only of those of one of the embedded derivatives.
(3)Each relevant contract to which the company is treated as party under subsection (2)(b) shall be treated for the purposes of that Schedule as an option, a future or a contract for differences according to whether the rights and liabilities of the embedded derivative would be of that character if contained in a separate contract.]
Textual Amendments
F9S. 94A inserted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 13
F10Words in s. 94A(1) substituted (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 28(2)
F1195 Gilt strips.U.K.
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Textual Amendments
F11Word in s. 95(1) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 14
96 Special rules for certain other gilts.U.K.
(1)This section applies as respects any loan relationship of a company if—
(a)it is represented by a security of any of the following descriptions—
(i)3½% Funding Stock 1999-2004; or
(ii)5½% Treasury Stock 2008-2012;
and
(b)it is one to which the company is a party otherwise than in the course of activities that form an integral part of a trade carried on by the company.
(2)The amounts falling for any accounting period to be brought into account for the purposes of this Chapter in respect of a loan relationship to which this section applies shall be confined to amounts relating to interest.
F12(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F12S. 96(3) repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 15, Sch. 42 Pt. 2(6)
97 Manufactured interest.U.K.
(1)[F13For the purposes of the Corporation Tax Acts, a company has a relationship to which this section applies in any case where—]
(a)any amount (“manufactured interest”) is payable by or on behalf of, or to, [F14the company] under any contract or arrangements relating to the transfer of an asset representing a loan relationship; and
(b)that amount is, or (when paid) will fall to be treated as, representative of interest under [F15that loan relationship](“the real interest”).
[F16and references to a relationship to which this section applies, and to a company’s being party to such a relationship, shall be construed accordingly]
[F17(2)Where a company has a relationship to which this section applies—
(a)this Chapter shall have effect in relation to the company and the manufactured interest under the relationship—
(i)as it would have effect if the manufactured interest were interest payable on a loan by, or (as the case may be) to, the company and were accordingly interest under a loan relationship to which the company is a party, and
(ii)where that company is the company to which the manufactured interest is payable, as if that relationship were the one under which the real interest is payable, F18...
F19(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and, subject to [F20paragraph (a)(ii)] above, references in the Corporation Tax Acts to a loan relationship accordingly include a reference to a relationship to which this section applies.]
[F21(2A)Where a company—
(a)has a relationship to which this section applies, but
(b)enters into a related transaction in respect of the right to receive manufactured interest,
then, for the purpose of bringing credits into account by virtue of subsection (2) above in respect of that or any other related transaction, the company shall continue to be treated as having a relationship to which this section applies even though the manufactured interest is not payable to the company.]
F22(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F22(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)Where section [F23736B(2) or] 737A(5) of the Taxes Act 1988 (deemed manufactured payments) has effect in relation to a transaction relating to an asset representing a loan relationship so as, for the purposes of [F24section 737 of, or] Schedule 23A to, that Act, to deem there to have been a payment representative of interest under that relationship, this section shall apply as it would have applied if such a representative payment had in fact been made.
[F25(4A)Where, for the purposes of section 736B of the Taxes Act 1988, a company is the borrower under a stock lending arrangement, then (pursuant to subsection (2A) of that section (which precludes deductions or group relief for the borrower)) no debits are to be brought into account for the purposes of this Chapter by that company in respect of the deemed representative payment under that section which is treated under subsection (4) above as if it had in fact been made.]
[F26(5)This section does not apply where the manufactured interest is treated by virtue of paragraph 5(2)(c) or (4)(c) of Schedule 23A to the Taxes Act 1988 (manufactured interest passing through the market) as not being income of the person who receives it.]
Textual Amendments
F13Words in s. 97(1) substituted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(2)(a)
F14Words in s. 97(1)(a) substituted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(2)(b)
F15Words in s. 97(1)(b) substituted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(2)(c)
F16Words in s. 97(1) added (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(2)(d)
F17S. 97(2) substituted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(3)
F18Word in s. 97(2) repealed (with effect in accordance with Sch. 11 Pt. 2(8) Note of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 11 Pt. 2(8)
F19S. 97(2)(b) repealed (with effect in accordance with Sch. 7 para. 11(5) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 11(2)(a), Sch. 11 Pt. 2(8)
F20Words in s. 97(2) substituted (with effect in accordance with Sch. 7 para. 11(5) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 11(2)(b)
F21S. 97(2A) inserted (with effect in accordance with Sch. 7 para. 11(5) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 11(3)
F22S. 97(3)(3A) repealed (with effect in accordance with Sch. 7 para. 11(5) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 11(4), Sch. 11 Pt. 2(8)
F23Words in s. 97(4) inserted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(5)
F24Words in s. 97(4) repealed (19.3.1997 with effect as mentioned in Sch. 18 Pt. VI(10), Notes 4, 6 of the amending Act) by 1997 c. 16, s. 113, Sch. 18 Pt. VI(10)
F25S. 97(4A) inserted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), s. 82(1), Sch. 25 Pt. 1 para. 13(6)
F26S. 97(5) repealed (19.3.1997 with effect as mentioned in Sch. 18 Pt. VI(10), Notes 3, 4, 6 of the amending Act) by 1997 c. 16, s. 113, Sch. 18 Pt. VI(10)
98 Collective investment schemes.U.K.
The provisions of this Chapter have effect subject to the provisions of Schedule 10 to this Act (which makes special provision in relation to certain collective investment schemes).
99 Insurance companies.U.K.
The preceding provisions of this Chapter have effect subject to Schedule 11 to this Act (which makes special provision in relation to certain insurance companies and in relation to corporate members of Lloyd’s).