16(1)This paragraph applies where—U.K.
(a)an amount becomes, or is to become, due and payable under a creditor relationship of a company in an accounting period ending on or after 1st April 1996, but
(b)by virtue of any of sub-paragraphs (i) to (iii) of section 74(1)(j) of the Taxes Act 1988 (or any enactment re-enacted in those sub-paragraphs), a deduction of an amount representing the whole or any part of the amount payable was authorised to be made, and was made, in computing for the purposes of corporation tax the profits of the company for any accounting period ending before that date.
(2)Subject to sub-paragraph (3) below, nothing in this Chapter [F1or Part 5 of the Corporation Tax Act 2009] shall require it to be assumed for the purposes of this Chapter [F2or that Part] that any part of the amount to which the deduction relates will be paid in full as it becomes due.
(3)Subject to sub-paragraph (4) below, where—
(a)the deduction relates to an amount payable under a creditor relationship of a company which has been proved or estimated to be a bad debt, but
(b)in an accounting period ending on or after 1st April 1996 the whole or any part of the liability under that relationship to pay that amount is discharged by payment,
this Chapter [F3and Part 5 of the Corporation Tax Act 2009] shall have effect, in the case of that company, as if there were a credit equal to the amount of the payment to be brought into account for the purposes of this Chapter [F4and that Part] for that period.
(4)Sub-paragraph (3) above does not apply to so much of any payment as is an amount in relation to which a credit [F5fell] to be brought into account for the purposes of this Chapter in accordance with paragraph 13(4) above.
Textual Amendments
F1Words in Sch. 15 para. 16(2) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 444(11)(a)(i) (with Sch. 2 paras. 1-10, 54)
F2Words in Sch. 15 para. 16(2) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 444(11)(a)(ii) (with Sch. 2 paras. 1-10, 54)
F3Words in Sch. 15 para. 16(3) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 444(11)(b)(i) (with Sch. 2 paras. 1-10, 54)
F4Words in Sch. 15 para. 16(3) inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 444(11)(b)(ii) (with Sch. 2 paras. 1-10, 54)
F5Word in Sch. 15 para. 16(4) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 444(11)(c) (with Sch. 2 paras. 1-10, 54)