the company stands (whether by reference to a security or otherwise) in the position of a creditor or debtor as respects any money debt; and

that debt is one arising from a transaction for the lending of money;

by the payment of money; or

by the transfer of a right to settlement under a debt which is itself a money debt

references to payments or interest under a loan relationship are references to payments or interest made or payable in pursuance of any of the rights or liabilities under that relationship; and

references to rights or liabilities under a loan relationship are references to any of the rights or liabilities under the agreement or arrangements by virtue of which that relationship subsists;

the profits and gains arising from the loan relationships of a company, and

any deficit on a company’s loan relationships,

as receipts of that trade falling to be brought into account in computing the F4profits of that trade for that period; or

as expenses of that trade which are deductible in computing those profits and gains.

credits that are not brought into account under subsection (2) above (“non-trading credits”), and

debits that are not so brought into account (“non-trading debits”),

the amount of the company’s profits and gains for that period that are chargeable under Case III of Schedule D as profits and gains arising from the company’s loan relationships; or

the amount of the company’s non-trading deficit for that period on its loan relationships.

to be set off against any profits of the company (of whatever description) for the deficit period; F6or

F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

to be carried back to be set off against profits for earlier accounting periods; F8. . .

F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

surrendered as group relief by virtue of section 403 of the Taxes Act 1988, or

treated in any of the ways specified in subsection (2) above,

in relation to a claim under subsection (2)(a), F12. . . or (c) above, means the deficit period; F13. . .

F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

all profits, gains and losses of the company, including those of a capital nature, which (disregarding interest and any charges or expenses) arise to the company from its loan relationships and related transactions; and

all interest under the company’s loan relationship and all charges and expenses incurred by the company under or for the purposes of its loan relationships and related transactions.

does not include a reference to any amounts required to be transferred to the company’s share premium account; but

does include a reference to any profits, gains or losses which, in accordance with F15generally accepted accounting practice, are carried to or sustained by any other reserve maintained by the company.

in bringing any of those relationships into existence;

in entering into or giving effect to any of those transactions;

in making payments under any of those relationships or in pursuance of any of those transactions; or

in taking steps for ensuring the receipt of payments under any of those relationships or in accordance with any of those transactions.

at the time when the charges or expenses are incurred, the relationship or transaction is one into which the company may enter but has not entered, and

if that relationship or transaction had been entered into by that company, the charges or expenses would be charges or expenses incurred as mentioned in subsection (3) above,

different authorised accounting methods are used for the purposes of this Chapter as respects the same loan relationship for different parts of the same accounting period or for successive accounting periods, and

no debit or credit falls to be brought into account under subsection (2)(c) or (3)(b) of section 90 below in consequence of the change of method, but

an amount is brought into account for the purposes of the company’s statutory accounts in respect of the change of method,

so much of an exchange gain or loss arising to a company in relation to an asset representing a loan relationship of the company as falls within subsection (4) below; or

so much of an exchange gain or loss arising to a company in relation to a liability representing a loan relationship of the company as falls within subsection (5) below; or

so much of any exchange gain or loss arising to a company as results from any translation from one currency to another pursuant to section 93A(4) of the Finance Act 1993 of the profit or loss of part of the company’s business and falls within subsection (4) below; or

so much of an exchange gain or loss arising to a company in relation to an asset or liability representing a loan relationship of the company as falls within a description prescribed for the purpose in regulations made by the Treasury.

is carried to or sustained by a reserve maintained by the company; and

is set off by or against an amount falling within subsection (6) below.

it represents the whole or part of an exchange gain or loss arising to the company in relation to any asset of the company; and

in accordance with generally accepted accounting practice it is carried to or sustained by the reserve mentioned in subsection (5)(a) above.

for the purposes of this Chapter, as credits or debits in respect of the loan relationships of the company concerned; or

for the purposes of the Taxation of Chargeable Gains Act 1992.

an accruals basis of accounting; and

a mark to market basis of accounting under which any loan relationship to which that basis is applied is brought into account in each accounting period at a fair value.

subject to paragraphs (b) to (c) below, it is in conformity with generally accepted accounting practice to use that method in that case;

it contains proper provision for allocating payments under a loan relationship F20, or arising as a result of a related transaction, to accounting periods; F21. . .

it contains proper provision for determining exchange gains and losses from loan relationships for accounting periods; and

where it is an accruals basis of accounting, it does not contain any provision (other than F23provision in respect of exchange losses or provision comprised in authorised arrangements for bad debt) that gives debits by reference to the valuation at different times of any asset representing a loan relationship.

allocates payments to the period to which they relate, without regard to the periods in which they are made or received or in which they become due and payable;

includes provision which, where payments relate to two or more periods, apportions them on a just and reasonable basis between the different periods;

assumes, subject to authorised arrangements for bad debt, that, so far as any company in the position of a creditor is concerned, every amount payable under the relationship will be paid in full as it becomes due;

secures the making of the adjustments required in the case of the relationship by authorised arrangements for bad debt; and

provides, subject to authorised arrangements for bad debt and for writing off government investments, that, where there is a release of any liability under the relationship, the appropriate amount in respect of the release is credited to the debtor in the accounting period in which the release takes place.

the references to authorised arrangements for bad debt are references to accounting arrangements under which debits and credits are brought into account in conformity with the provisions of paragraph 5 of Schedule 9 to this Act; and

the reference to authorised arrangements for writing off government investments is a reference to accounting arrangements that give effect to paragraph 7 of that Schedule.

the transfer of all the company’s rights under the relationship in respect of amounts which at that time are not yet due and payable; and

the release of all the company’s liabilities under the relationship in respect of amounts which at that time are not yet due and payable.

where the basis used in those accounts is an authorised accounting method, that method; and

where it is not, the authorised accounting method with which it equates.

would be used as respects some or all of the company’s loan relationships, were the company a UK company following generally accepted accounting practice, but

is not the basis of accounting used as respects those loan relationships in the company’s statutory accounts,

must be made before the expiration of the period of two years following the end of the company’s first accounting period beginning on or after 1st October 2002 in which it is party to a loan relationship in relation to which such an election may be made;

has effect for that accounting period and all subsequent accounting periods of the company; and

is irrevocable.

for the accounting periods mentioned in subsection (3B)(b) above, and

as respects any derivative contracts to which the company is or may become party in any of those accounting periods,

a method determined under subsection (3) above,

an authorised mark to market method in accordance with an election under subsection (3A) above, or

an authorised mark to market method in accordance with subsection (3D) above,

a basis of accounting equates with an authorised accruals basis of accounting if it purports to allocate payments under a loan relationship to accounting periods according to when they are taken to accrue; and

it purports to bring that relationship into account in each accounting period at a value which would be a fair value if the valuation were made on the basis that interest under the relationship were to be disregarded to the extent that it has already accrued; and

the credits and debits produced in the case of that relationship by that method (when it is properly applied) correspond, for all practical purposes, to the credits and debits produced in the case of that relationship, and for the same accounting period, by an authorised mark to market basis of accounting.

any accounts relating to that company that are drawn up in accordance with any requirements of the M1Companies Act 1985 or the M2Companies (Northern Ireland) Order 1986 that apply in relation to that company;

any accounts relating to that company that are drawn up in accordance with any requirements of regulations under section 70 of the M3Friendly Societies Act 1992 that apply in relation to that company;

any accounts relating to that company which are accounts to which Part I of Schedule 21C to the M4Companies Act 1985 or Part I of Schedule 21D to that Act (companies with UK branches) applies;

in the case of a debtor relationship of the company, a person standing in the position of a creditor as respects the debt in question; or

in the case of a creditor relationship of the company, a person standing in the position of a debtor as respects that debt.

the other person is a company and there is a time in that period F30. . . when one of the companies has had control of the other; F31or

the other person is a company and there is a time in that period F32. . . when both the companies have been under the control of the same person; or

F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

whether there is for the purposes of this Chapter a connection, within the meaning of this section, between any two companies for an accounting period in the case of a loan relationship, or

to what extent any amount is to be treated under this Chapter in any particular way as a result of there being, or not being, such a connection,

by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or

by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,

any shares held by a company, and

any voting power or other powers arising from shares held by a company,

the property, rights or powers had been apportioned between, and were held or exercisable by, the partners severally, and

the apportionment had been in the shares in which the profit or loss of the accounting period of the partnership would be apportioned between the partners under subsection (2) of that section,

the company, in the course of carrying on any activities forming an integral part of a trade carried on by that company in that period, disposes of or acquires assets representing creditor relationships;

that period is one for which the company uses an authorised mark to market basis of accounting as respects all the creditor relationships represented by assets acquired in the course of those activities;

the asset representing the creditor relationship in question was acquired in the course of those activities;

there is a time in that period when assets of the same kind as the asset representing the loan relationship in question are in the beneficial ownership of persons other than the company; and

there is not more than three months, in aggregate, in that accounting period during which the equivalent of 30 per cent. or more of the assets of that kind is in the beneficial ownership of connected persons.

assets of the company representing any of its creditor relationships are linked for that period to its basic life assurance and general annuity business;

that period is one for which the company uses an authorised mark to market basis of accounting as respects all the creditor relationships of the company represented by assets that are so linked;

the asset representing the creditor relationship in question is so linked;

there is a time in that period when assets of the same kind as the asset representing the creditor relationship in question are in the beneficial ownership of persons other than the company; and

there is not more than three months, in aggregate, in that accounting period during which the equivalent of 30 per cent. or more of the assets of that kind is in the beneficial ownership of connected persons.

assets shall be taken to be of the same kind where they are treated as being of the same kind by the practice of any recognised stock exchange, or would be so treated if dealt with on such a stock exchange; and

subsection (1) above has effect in the case of a creditor relationship of a company, and

the person who stands in the position of a debtor as respects the debt in question is also a company,

the conditions in subsections (2) and (3) below are satisfied in relation to an asset representing a creditor relationship of a company; and

the object, or one of the main objects, of the company entering into or becoming a party to the creditor relationship was the securing, whether for itself or any other person, of a tax advantage (within the meaning of Chapter 1 of Part 17 of the Taxes Act 1988).

the rate of interest payable in the case of the asset;

the amount payable to discharge the debt; or

the time at which any payments under the asset (whether of interest or otherwise) fall due.

the fair value of the asset immediately after the change, and

the issue price of the asset,

different authorised accounting methods are used for the purposes of this Chapter as respects the same loan relationship for different parts of the same accounting period or for successive accounting periods.

the change of method is in pursuance of a requirement of this Chapter as to the basis of accounting to be used for the purposes of this Chapter in the case of the loan relationship; and

the case does not fall within subsection (1A) below

the assumptions specified in subsection (4) below shall be made;

each method shall be applied on those assumptions as respects the part of the period for which it is used; and

the credits and debits given by the application of those methods on those assumptions shall be brought into account in the accounting period in which the change of method takes effect.

the net credit or debit shall be brought into account for the purposes of this Chapter in the accounting period as from the beginning of which the change of method takes effect.

that the company ceased to be a party to the relationship immediately before the end of the period, or part of a period, for which the superseded method is used;

that the company again became a party to that relationship as from the beginning of the period or, as the case may be, part of a period for which the other authorised accounting method is used;

that the relationship to which the company is deemed to have become a party is separate and distinct from the one to which it is deemed to have ceased to be a party;

that the amount payable under the transaction comprised in each of the assumptions specified in paragraphs (a) and (b) above was equal to the fair value of the relationship; and

so far as relevant, that that amount became due at the time when the company is deemed to have ceased to be a party to the relationship or, as the case may be, to have again become a party to it.

a mark to market basis of accounting is superseded by an accruals basis of accounting in the case of any loan relationship,

the relationship is one to which the company in question is still a party at the end of the period or part of a period for which the accruals basis of accounting is used, and

the amount which would have accrued in respect of that relationship in the period or part of a period for which the accruals basis of accounting is used falls to be determined for the purposes of this section in accordance with the assumptions mentioned in subsection (4) above,

in a case to which subsection (3) above applies, the amount taken for the purposes of subsection (3)(a)(ii) above to be the closing value as at the end of the period for which the accruals basis of accounting is used; and

in a case to which subsection (2) above applies, the amount which, without the making of the assumptions mentioned in subsection (4) above, would be taken to be the closing value as at the end of the part of the period for which that basis is used.

the asset represents a creditor relationship of a company;

the rights attached to the asset include provision by virtue of which the company is or may become entitled to acquire (whether by conversion or exchange or otherwise) F49shares in a company;

the extent to which shares may be acquired under F51any such provision is not determined using a cash value which is specified in that provision or which is or will be ascertainable by reference to the terms of that provision;

the asset is not a relevant discounted security within the meaning of Schedule 13 to this Act F52or an excluded indexed security within the meaning of that Schedule;

the rights attached to the asset do not include provision by virtue of which the company may require a person other than the issuing company to acquire the asset for an amount which would, if payable on redemption, be an amount involving a deep gain for the purposes of paragraph 3 of that Schedule;

at the time when the asset came into existence there was a more than negligible likelihood that F54the rights to acquire shares in a company would in due course be exercised to a significant extent; F55. . .

the asset is not one the disposal of which by the company would fall to be treated as a disposal in the course of activities forming an integral part of a trade carried on by the company.

capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or

capital the holders of which have no right to a dividend of any description nor any other right to share in the profits of the company.

shares which are listed on a recognised stock exchange, or

shares in a company which is a trading company or a holding company;

“the relevant shares” means the shares which would be acquired by exercising the rights attached to the asset to their full extent, and

“the relevant time” means the time at which the rights to acquire those shares are exercised.

the asset shall cease to be an asset to which this section applies, and

it shall be treated, for the purposes of subsection (7)(a) below, as having ceased to be such an asset at the time when the circumstances giving rise to that connection arose.

amounts relating to interestF61; and

amounts relating to exchange gains or losses

falls to be brought into account under subsections (2) and (3) above as accruing to any company at any time; and

in consequence of, or of the terms of, the disposal or acquisition, is not paid or payable to the company to which it is treated for the purposes of this Chapter as accruing.

shall be increased by the addition of any relevant exchange losses, determined in accordance with subsection (5C) below; and

shall (after giving effect to any such increase) be reduced (but not below nil) by the deduction of any relevant exchange gains, determined in accordance with that subsection.

the amount of any exchange gains or, as the case may be, losses brought into account under subsections (2) and (3) above in respect of the asset, by the company making the disposal, for a relevant accounting period throughout which the relevant condition is satisfied; and

for any relevant accounting period not falling within paragraph (a) above in which the relevant condition is at some time satisfied, an amount which, on a just and reasonable apportionment, represents so much of the amount of any exchange gains or, as the case may be, losses brought into account under subsections (2) and (3) above in respect of the asset, by the company making the disposal, for that period as is referable to the part of the period for which the relevant condition is satisfied.

the amount of the relevant exchange gains falling to be deducted under subsection (5A)(b) above, exceeds

the amount required to reduce the amount or value of the consideration to nil,

is a disposal of that asset (within the meaning of the Taxation of Chargeable Gains Act 1992); or

would be such a disposal but for section F64. . . 116(10) of that Act (reorganisations etc.);

ceases at any time to be an asset to which this section applies, but

does not cease at that time to represent a creditor relationship of that company,

sections 127 to 130 of that Act would apply, apart from the provisions of section 116 of that Act, by virtue of any provision of Chapter II of Part IV of that Act;

the asset in question represents both the original shares and the new holding for the purposes of those sections;

the market value of the asset at the time of the transaction is an amount equal to the relevant consideration.

is not paid or payable to the company before the time of the deemed disposal; but

is interest falling to be brought into account under subsections (2) and (3) above as having accrued before that time.

the liability represents a debtor relationship of a company (“the debtor company”); and

any amounts payable by the debtor company in respect of, or in connection with, any such acquisition of shares as is described in subsection (1)(b)(ii) above, but not any amounts to which subsection (4) below applies; and

any charges or expenses incurred by the debtor company as described in paragraph (b), (c) or (d) of section 84(3) above, where the related transaction in question relates to, or is connected with, the acquisition of shares by another person (whether by conversion or exchange or otherwise) as described in subsection (1)(b) above.

the debtor company is carrying on a banking business or a business consisting wholly or partly in dealing in securities, and

it entered into the debtor relationship in the ordinary course of that business.

the debtor company is carrying on a banking business or a business consisting wholly or partly in dealing in securities, and

it entered into the debtor relationship in the ordinary course of that business.

in a case where the loan relationship is a creditor relationship, the asset representing the loan relationship is one the disposal of which by the company would fall to be treated as a disposal in the course of activities forming an integral part of a trade carried on by the company.

in a case where the loan relationship is a debtor relationship, the liability representing the loan relationship is a liability entered into by the company in the course of activities forming an integral part of a trade carried on by the company; or

the loan relationship is one to which section 93A below applies.

falls to be brought into account under subsections (2) and (3) above as accruing to any company at any time; and

in consequence of, or of the terms of, the disposal or acquisition, is not paid or payable to the company to which it is treated for the purposes of this Chapter as accruing.

the period between the time of the original loan and the discharge of the money debt; or

any other period in which almost all of that period is comprised and which differs from that period exclusively for purposes connected with giving effect to a valuation in relation to rights or liabilities under the loan relationship.

there is a provision which, in the case of any loan relationship, falls within subsection (6) above,

that provision is made subject to any other provision applying to the determination of the amount payable to discharge the money debt,

that other provision is to the effect only that the amount so payable must not be less than a specified percentage of the amount falling for the purposes of this Chapter to be regarded as the amount of the original loan, and

the specified percentage is not more than 10 per cent.,

an estate or interest in land (wherever situated), or

qualifying ordinary shares which are listed on a recognised stock exchange.

is a disposal of that asset (within the meaning of the Taxation of Chargeable Gains Act 1992); or

would be such a disposal but for section 127 or 116(10) of that Act (reorganisations etc.);

capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or

capital the holders of which have no right to a dividend of any description nor any other right to share in the profits of the company.

that loan relationship and one or more other transactions are associated transactions designed to produce a guaranteed return;

any such other transaction is F75 a derivative contract falling within paragraph 6 of Schedule 26 to the Finance Act 2002 (“an associated derivative contract”); and

the guaranteed return comprises the return consisting of the amount that must be paid to discharge the money debt arising in connection with that loan relationship taken together with the return from any one or more of F76the associated derivative contracts.

the likely effect of the transactions,

the circumstances in which the transactions are entered into, or in which any of them is entered into, or

the matters in both of paragraphs (a) and (b),

F80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

which equates, in substance, to the return on an investment of money at interest.

that there appears to be no risk that that subject matter will fluctuate; or

that the risk that it will fluctuate appears to be insignificant.

the references, in relation to a loan relationship, to the underlying subject matter are references to the value of chargeable assets of a particular description to which that relationship is linked;

the references, in relation to an associated derivative contract, to the underlying subject matter are to be construed in accordance with paragraphs 6(2)(a) and 11 of Schedule 26 to the Finance Act 2002.

ceases at any time to be a loan relationship to which section 93 above applies, but

does not cease at that time to be a loan relationship of that company,

to have disposed of the asset for the relevant consideration immediately before the time when the loan relationship ceases to be one to which section 93 above applies, and

to have re-acquired it for the relevant consideration immediately after that time.

sections 127 to 130 of that Act would apply, apart from the provisions of section 116 of that Act, by virtue of any provision of Chapter 2 of Part 4 of that Act;

the asset in question represents both the original shares and the new holding for the purposes of those sections;

the market value of the asset at the time of the transaction is an amount equal to the relevant consideration.

is not paid or payable to the company before the time of the deemed disposal; but

is interest falling to be brought into account under section 93(2) and (3) above as having accrued before that time.

the authorised accounting method applied as respects the index-linked gilt-edged security gives credits or debits by reference to the value of the security at two different times, and

there is any change in the retail prices index between those times.

there are to be no adjustments under this section; or

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.

shall not have effect in relation to any gilt-edged security issued before the making of the order; but

may make different provision for different descriptions of securities.

that index for the month in which the earlier time falls; and

that index for the month in which the later time falls

the security shall be deemed to have been redeemed at the time of the exchange by the payment to that person of its market value; and

that person shall be deemed to have acquired each strip for the amount which bears the same proportion to that market value as is borne by the market value of the strip to the aggregate of the market values of all the strips received in exchange for the security.

each of the strips shall be deemed to have been redeemed at the time of the exchange by the payment to that person of the amount equal to its market value; and

that person shall be deemed to have acquired the security received in the exchange for the amount equal to the aggregate of the market values of the strips given in exchange for the security.

make different provision for different cases; and

contain such incidental, supplemental, consequential and transitional provision as the Treasury may think fit.

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.

any amount (“manufactured interest”) is payable by or on behalf of, or to, F86the company under any contract or arrangements relating to the transfer of an asset representing a loan relationship; and

that amount is, or (when paid) will fall to be treated as, representative of interest under F87that loan relationship(“the real interest”).

the only credits or (subject to subsection (4A) below) debits to be brought into account for the purposes of this Chapter by virtue of this section in respect of a relationship are those relating to that interest,

are to be brought into account under section 82(2) above, or

are to be treated as non-trading debits or non-trading credits,

the company stands, or has stood, in the position of a creditor or debtor as respects a money debt;

the money debt is not one which arose from a transaction for the lending of money (so that, in consequence of section 81(1)(b) above, there is no loan relationship); and

this Chapter shall have effect in relation to the interest payable under, or the exchange gains or losses arising to the company from, the relationship as it has effect in relation to interest payable under, or (as the case may be) exchange gains or losses arising to the company from, a loan relationship to which the company is a party; but

the only credits or debits to be brought into account for the purposes of this Chapter in respect of the relationship are those relating to the interest or (as the case may be) to the exchange gains or losses;

interest on a money debt; or

interest on an amount which is treated as a money debt;

are to be brought into account under section 82(2) above, or

are to be treated as non-trading debits or non-trading credits,

is paid for the purposes of a trade carried on by the company;

is received in the course of activities forming an integral part of such a trade; or

in the case of deemed interest, would be deemed to be so paid or received.

is owed by the company for the purposes of a trade carried on by the company; or

is held in the course of activities forming an integral part of such a trade.

relate to interest payable under the Tax Acts, and

fall to be brought into account by virtue of this section in relation to any company,

is an amount of tax,

is an amount of tax payable under the law of a territory outside the United Kingdom, or

is an amount which would, but for any statutory provision or rule of law to the contrary other than section 74(1)(f) or (g) of the Taxes Act 1988, be deductible as an expense in computing profits in accordance with Case I of Schedule D or as an expense of management within section 75 of the Taxes Act 1988,

any currency held by the company;

in the case of a company carrying on insurance business, any deferred acquisition costs, within the meaning of Assets item G.II in the Balance Sheet Format set out after paragraph 9 of Schedule 9A to the Companies Act 1985 (form and content of accounts of insurance companies and groups) as read with note (17) of the Notes on the Balance Sheet Format (which follow immediately after that format).

any provision made by the company for the purposes of its statutory accounts in respect of a liability to which the company may become subject;

the duty to settle the liability in question would (if the company were to become subject to it) be owed for the purposes of a trade, a Schedule A business or an overseas property business (within the meaning of section 70A of the Taxes Act 1988); and

the provision falls to be taken into account (apart from this Chapter) in computing the profits or losses of the trade, Schedule A business or overseas property business for corporation tax purposes.

an amount representing that profit or loss, or

an amount representing the profit or loss accruing to that company on that contract,

profits or gains, or

losses,

any mutual trading, or

any mutual insurance or other mutual business which is not life assurance business (within the meaning of Chapter I of Part XII of the Taxes Act 1988),

a company ceases to be a party to a loan relationship in an accounting period (the “cessation period”),

profits, gains or losses arise to the company from the loan relationship or a related transaction in that accounting period, and

the credits or debits brought into account for the purposes of this Chapter for that accounting period do not include credits or debits which represent the whole of those profits, gains or losses,

whether, in a post-cessation period, the loan relationship is to any extent referable to a particular business, or a particular class, category or description of business, carried on by the company,

whether the loan relationship has to any extent a particular purpose in a post-cessation period, or

whether there is a connection between the company and any other person for a post-cessation period,

for the purposes of corporation tax, in relation to accounting periods ending after 31st March 1996; and

so far as it makes provision for the purposes of income tax, in relation to the year 1996-97 and subsequent years of assessment.