Corporation Tax Act 2009

311 Amounts not fully recognised for accounting purposes: introduction

(1) Section 312 applies for the purpose of determining the credits and debits which a company is to bring into account for a period for the purposes of this Part in the following case.

(2) The case is where—

(a) the company is, or is treated as, a party to a creditor relationship in the period,

(b) an amount is not fully recognised for the period in respect of the relationship as a result of the application of generally accepted accounting practice in relation to the relationship (see subsection (6)), and

(c) condition A or B is met.

(3) Condition A is that—

(a) the company is or is treated as a party to a debtor relationship in the period, and

(b) an amount is not fully recognised for the period in respect of the debtor relationship as a result of the application of generally accepted accounting practice in relation to the relationship.

(4) Condition B is that—

(a) an amount (a “relevant capital contribution”) has at any time been contributed to the company which forms part of its capital for the period, and

(b) an amount is not fully recognised for the period in respect of the relevant capital contribution as a result of the application of generally accepted accounting practice in relation to the contribution.

(5) It does not matter for the purposes of subsection (4) whether the contribution forms part of the company’s share capital or other capital for the period.

(6) For the purposes of this section an amount is not fully recognised for a period in respect of a relationship of a company or a relevant capital contribution to it if—

(a) no amount in respect of the relationship or contribution is recognised in determining its profit or loss for the period, or

(b) an amount is so recognised in respect of only part of the relationship or contribution.