Finance Act 2009

Loan relationships and derivatives

41 Loan relationships involving connected parties

Schedule 20 contains provision about loan relationships involving connected parties.

42 Release of trade etc debts

(1) CTA 2009 is amended as follows.

(2) In section 353 (introduction to Chapter 6 of Part 5)—

(a) omit subsection (3), and

(b) in subsection (6), after “loss”” insert “and “release debit””.

(3) In section 476(1) (definitions for purposes of Parts 5 and 6), after the definition of “profit sharing arrangements” insert—

““release debit”, in relation to a company, means a debit in respect of a release by the company of a liability under a creditor relationship of the company,”.

(4) Section 479 (relevant non-lending relationships not involving discounts) is amended as follows.

(5) In subsection (2)—

(a) omit the “and” at the end of paragraph (b),

(b) in paragraph (c), after “loss)” insert “or release debit”, and

(c) insert at the end “, and

(d) a debt in relation to which a relevant deduction has been allowed to the company and which is released.”

(6) In subsection (3), for “(2)” substitute “(2)(c)”.

(7) After that subsection insert—

“(3A) In subsection (2)(d) “relevant deduction” means a deduction allowed in calculating the profits of a trade, UK property business or overseas property business.”

(8) Section 481 (application of Part 5 to relevant non-lending relationships) is amended as follows

(9) In subsection (3)—

(a) in paragraph (d), after “loss” insert “or release debit” and for “impairment, and” substitute “impairment or release,”, and

(b) insert at the end “and

(f) in the case of a debt in relation to which a relevant deduction has been allowed to the company and which is released, the release.”

(10) In subsection (4), for “(3)” substitute “(3)(d) and (e)”.

(11) After that subsection insert—

“(4A) In subsection (3)(f) “relevant deduction” has the meaning given in section 479(3A).”

(12) The amendments made by this section are treated as having come into force on 22 April 2009.

43 Foreign exchange matching: anti-avoidance

Schedule 21 contains anti-avoidance provisions relating to exchange gains and losses arising from loan relationships and derivative contracts.