SCHEDULES

SCHEDULE 9U.K. Loan relationships: special computational provisions

Modifications etc. (not altering text)

[F1Release of liability under debtor relationship] [F2 : cases in which credit need not be brought into account] U.K.

Textual Amendments

F1Sch. 9 para. 5 heading substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(2)

F2Words in Sch. 9 para. 5 cross-heading added (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 11(2)

5F3(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F3(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3(2A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Where—

(a)a liability to pay any amount under a debtor relationship of a company is released, and

(b)the release takes place in an accounting period for which [F4an amortised cost basis of accounting] is used as respects that relationship,

[F5no credit in respect of the release shall be required to be brought into account in the case of that company if any of the [F6five] conditions set out below is satisfied.]

[F7(4)Condition 1 is that the release is part of a [F8statutory insolvency arrangement].

(5)Condition 2 is that the debtor relationship is one as respects which section 87 of this Act (accounting method where parties have a connection) [F9applies]. [F10This condition does not apply in the case of a credit required to be brought into account by virtue of paragraph 4A (deemed release on impaired debt becoming held by connected company).]

(6)Condition 3 is that—

(a)in the case of the company releasing the amount, the circumstances are as described in any of paragraphs (a) to (d) of paragraph 6A(1) below (insolvent liquidation etc),

(b)immediately before the time at which those circumstances arose in the case of that company, the relationship was one as respects which section 87 of this Act [F11applies], and

(c)immediately after that time, the relationship was not one as respects which section 87 of this Act [F12applies].

In the application of paragraphs (a) to (d) of paragraph 6A(1) below for the purposes of paragraph (a) above, references in those paragraphs to the company which has the creditor relationship are to be taken as references to the company releasing the amount.

(7)Condition 4 is that—

(a)the relationship is not one as respects which section 87 of this Act [F13applies], and

(b)in the case of the company which has the debtor relationship, the circumstances are as described in any of paragraphs (a) to (d) of paragraph 6A(1) below.

In the application of paragraphs (a) to (d) of paragraph 6A(1) below for the purposes of paragraph (b) above, references in those paragraphs to the company which has the creditor relationship are to be taken as references to the company which has the debtor relationship.]

[F14(8)Condition 5 is that the release is in consideration of, or of any entitlement to, shares forming part of the ordinary share capital of the debtor company.]

Textual Amendments

F3Sch. 9 para. 5(1)-(2A) repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(3), Sch. 42 Pt. 2(6)

F4Words in Sch. 9 para. 5(3)(b) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(4)

F5Words in Sch. 9 para. 5(3) substituted (with effect in accordance with Sch. 8 para. 3(4) of the amending Act) by Finance Act 2004 (c. 12), Sch. 8 para. 3(2)

F6Word in Sch. 9 para. 5(3) substituted (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 11(3)

F7Sch. 9 para. 5(4)-(7) inserted (with effect in accordance with Sch. 8 para. 3(4) of the amending Act) by Finance Act 2004 (c. 12), Sch. 8 para. 3(3)

F8Words in Sch. 9 para. 5(4) substituted (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 11(4)

F9Word in Sch. 9 para. 5(5) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(5)

F10Words in Sch. 9 para. 5(5) added (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 11(5)

F11Word in Sch. 9 para. 5(6)(b) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(5)

F12Word in Sch. 9 para. 5(6)(c) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(5)

F13Word in Sch. 9 para. 5(7)(a) substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 20(5)

F14Sch. 9 para. 5(8) inserted (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 11(6)