This paragraph applies where, in pursuance of F1Schedule 28AA to the Taxes Act 1988 (provision not at arm’s length), any amount falls to be treated as interest payable under a loan relationship of a company.

F2That Schedule shall have effect, notwithstanding the provisions of any authorised accounting method, so as to require credits or debits relating to the deemed interest to be brought into account for the purposes of this Chapter to the same extent as they would be in the case of an actual amount of interest accruing or becoming due and payable under the loan relationship in question.