6CBad debt etc: departure not permitted by paragraph 6: cessation of connection

1

Where, in the case of a creditor relationship of a company,—

a

a departure that would otherwise have been allowed under paragraph 5(1) above in respect of an amount is or was, by virtue of paragraph 6 above, not allowed in the case of an accounting period; and

b

there is a subsequent accounting period for which there is, within the meaning of section 87 of this Act, no connection between the company and any person standing in the position of a debtor as respects the debt,

sub-paragraphs (2) and (3) below shall apply.

2

Where this sub-paragraph applies, no credit shall be required to be brought into account by virtue of paragraph 5(2) above in respect of an amount—

a

for the first accounting period falling within sub-paragraph (1)(b) above, or

b

for any subsequent such accounting period,

to the extent that the amount in question corresponds to the amount mentioned in sub-paragraph (1)(a) above.

3

Where this sub-paragraph applies, no debit shall be brought into account in respect of an amount—

a

for the first accounting period falling within sub-paragraph (1)(b) above, or

b

for any subsequent such accounting period,

to the extent that the amount in question represents the amount mentioned in sub-paragraph (1)(a) above.