[F1469Debt restructuringU.K.
(1)This section—
(a)makes provision for treating a person (“D”) who is a related party of another person (“C”) as if they were not related parties of each other but only in respect of particular liabilities or transactions, and
(b)is expressed to apply in relation to loan relationships but also applies (with any necessary modifications) in relation to any other financial liability owed to, or any transaction with, C.
(2)If—
(a)D is party to a loan relationship as debtor and C is party to the loan relationship as creditor,
(b)D subsequently becomes a related party of C in consequence of a relevant release of debt, and
(c)before D became a related party of C in consequence of the release none of the parties to the loan relationship had been related parties of each other,
D and C are treated for the purposes of this Part as if, in relation to the loan relationship (and anything done under or for the purposes of it), they were not related parties of each other at times on or after the release.
(3)There is a “relevant release of debt” at any time for the purposes of this section if—
(a)a liability to pay an amount under a person's debtor relationship is released under the arrangements,
(b)that person is D or a person who is a related party of D at that time, and
(c)immediately before the release, it is reasonable to conclude that, without the release and any arrangements of which the release forms part, there would be a material risk that, at some time within the next 12 months, D or the related party would be unable to pay its debts.
(4)For the purposes of this section “debtor relationship” has the meaning given by section 302(6) of CTA 2009 (reading the references in that subsection to a company as references to a person).]
Textual Amendments
F1Pt. 10: the existing Pt. 10 renumbered as Pt. 11 (except for ss. 375, 376 which are repealed), the existing ss. 372-374, 377-382 renumbered as ss. 499-507 and a new Pt. 10 (ss. 372-498) inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1, 10(1)(2)(a)(3) (with Sch. 5 paras. 27, 32-34)