- Latest available (Revised)
- Point in Time (01/01/2014)
- Original (As enacted)
Point in time view as at 01/01/2014.
Finance Act 2009, SCHEDULE 30 is up to date with all changes known to be in force on or before 14 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
Section 61
1(1)In ITA 2007, after section 384 insert—U.K.
(1)Relief is not to be given under this Chapter for interest paid by a person on a loan if—
(a)the loan is made to the person (“the borrower”) as part of arrangements which appear very likely to produce a post-tax advantage, and
(b)the arrangements seem to have been designed to reduce any income tax or capital gains tax to which the borrower (or any person whose circumstances are like those of the borrower) would be liable apart from the arrangements.
(2)Arrangements “appear very likely” to produce a post-tax advantage if (and only if) it would be reasonable to assume from either or both of—
(a)the likely effect of the arrangements, and
(b)the circumstances in which the arrangements, or any parts of the arrangements, are entered into or effected,
that there is no risk, or only an insignificant risk, that they will not produce a post-tax advantage.
(3)“Produce a post-tax advantage” means give rise to a sum or sums—
(a)payable to the borrower or a person connected with the borrower, or
(b)payable to any other person for the benefit of the borrower or a person connected with the borrower,
of an amount (or aggregate amount) which, after making the appropriate tax adjustments, is equal to or greater than the relevant amount.
(4)“The relevant amount” is the aggregate of—
(a)the amount required to meet the borrower's obligations in respect of the loan, and
(b)any amount which is used by the borrower in the same way as that which entitles the borrower to relief under this Chapter in respect of the loan and is not money lent to the borrower under any loan.
(5)If, with a view to securing that the condition in subsection (1)(a) is not met, the arrangements make provision for securing that, in all or any circumstances in which they do not produce a post-tax advantage, they will produce a broadly compensatory amount, the arrangements are to be regarded for the purposes of subsection (2) as making provision for securing the production of a post-tax advantage in those circumstances.
(6)“Produce a broadly compensatory amount” means give rise to a sum or sums payable as mentioned in subsection (3) of an amount (or aggregate amount) which, after making the appropriate tax adjustments, is not significantly less than the relevant amount.
(7)For the purposes of subsections (3) and (6) causing the value of an asset to be obtainable, directly or indirectly, by a person is to be treated as equivalent to giving rise to a sum payable to the person of an amount equal to that value.
(8)To make the appropriate tax adjustments for the purpose of subsection (3) or (6)—
(a)if A exceeds B, deduct the amount of the excess from the amount (or aggregate amount), and
(b)if B exceeds A, add the amount of the excess to the amount (or aggregate amount).
(9)For the purposes of subsection (8)—
A is the amount of any income tax, any capital gains tax and any tax under the law of a territory outside the United Kingdom to which the borrower is liable in consequence of the arrangements, and
B is the amount by which the borrower's liability to income tax and capital gains tax is (or apart from subsection (1) would be) reduced in consequence of the arrangements.
(10)Arrangements seem to have been designed to reduce any income tax or capital gains tax to which the borrower (or any person whose circumstances are like those of the borrower) would be liable apart from the arrangements if (and only if) it would be reasonable to assume from either or both of—
(a)the likely effect of the arrangements, and
(b)the circumstances in which the arrangements, or any parts of the arrangements, are entered into or effected,
that the arrangements, or any parts of the arrangements, are designed to do so.
(11)In this section “arrangements” means arrangements consisting of any number of agreements, understandings, schemes, transactions or other arrangements (whether or not legally enforceable); but in subsections (1)(a), (2), (5) and (9) the references to arrangements also include any related transactions.
(12)In subsection (11) “related transactions” means transactions in the case of which it is reasonable to assume from either or both of—
(a)the likely effect of the transactions, and
(b)the circumstances in which the transactions are entered into or effected,
that the transactions would not have been entered into or effected independently of the arrangements.
(13)Transactions are not prevented from being related transactions just because the transactions—
(a)are not between the same parties, or
(b)are not between parties to the arrangements.”
(2)The amendment made by sub-paragraph (1) has effect in relation to interest paid on or after 19 March 2009.
2F1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.
F1(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)In section 317(5) of CTA 2009 (carrying value), before paragraph (a) insert—
“(za)sections 311 and 312 (amounts not fully recognised for accounting purposes),”.
(8)The amendments made by this paragraph have effect in relation to periods of account beginning on or after 22 April 2009.
(9)But for the purposes of sub-paragraph (8) a period of account beginning before, and ending on or after, 22 April 2009 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate periods of account.
Textual Amendments
F1Sch. 30 para. 2(1)-(6) omitted (with effect in accordance with Sch. 4 para. 13 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 4 para. 12(a)
3(1)In CTA 2009, after section 599 insert—U.K.
(1)Section 599B applies for the purpose of determining the credits and debits which a company is to bring into account for a period for the purposes of this Part in the following case.
(2)The case is where—
(a)the company is, or is treated as, a party to a derivative contract in the period,
(b)condition A or B is met, and
(c)an amount is not fully recognised for the period in respect of the contract as a result of the application of generally accepted accounting practice in relation to the contract and the contribution or securities referred to in the condition that is met.
(3)Condition A is that—
(a)an amount (a “relevant capital contribution”) has at any time been contributed to the company which forms part of its capital for the period, and
(b)an amount is not fully recognised for the period in respect of the relevant capital contribution as a result of the application of generally accepted accounting practice in relation to the derivative contract and the relevant contribution.
(4)It does not matter for the purposes of subsection (3) whether the contribution forms part of the company's share capital or other capital for the period.
(5)Condition B is that—
(a)the company has issued securities that form part of its capital for the period, and
(b)an amount is not fully recognised for the period in respect of the securities as a result of the application of generally accepted accounting practice in relation to the derivative contract and the securities.
(6)For the purposes of this section an amount is not fully recognised for a period in respect of a contract of a company, a contribution to it or securities issued by it if—
(a)no amount in respect of the contract, contribution or securities is recognised in determining its profit or loss for the period, or
(b)an amount is so recognised in respect of only part of the contract, contribution or securities.
(1)In determining the credits and debits which a company is to bring into account for the period referred to in section 599A(1) for the purposes of this Part in respect of the derivative contract mentioned in section 599A(2), the assumption in subsection (2) is to be made.
(2)The assumption is that an amount in respect of the whole of the contract in question is recognised in determining the company's profit or loss for the period.
(3)The credits and debits which are to be brought into account for the purposes of this Part by the company in respect of the contract are to be determined on the basis of fair value accounting.”
(2)In section 702(3) of CTA 2009 (carrying value), before paragraph (c) insert—
“(ca)sections 599A and 599B (amounts not fully recognised for accounting purposes),”.
(3)The amendments made by this paragraph have effect in relation to periods of account beginning on or after 22 April 2009.
(4)But for the purposes of sub-paragraph (3) a period of account beginning before, and ending on or after, 22 April 2009 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate periods of account.
F24U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F2Sch. 30 para. 4 omitted (with effect in accordance with Sch. 5 para. 7(3)(4) of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 5 para. 7(2)(b)
5(1)In section 540(3) of CTA 2009 (manufactured interest treated as interest under loan relationship), insert at the end “and the credits and debits to be brought into account in respect of manufactured interest for any period are those that are recognised in determining the company's profit or loss for the period in accordance with generally accepted accounting practice (but subject to the provisions of Part 5, including, in particular, section 307(3) and to paragraph 7A of Schedule 23A to ICTA).”U.K.
(2)In section 97(2) of FA 1996 (equivalent provision for accounting periods ending before 1 April 2009), insert at the end “and the credits and debits to be brought into account in respect of manufactured interest for any period are those that are recognised in determining the company's profit or loss for the period in accordance with generally accepted accounting practice (but subject to the provisions of this Chapter (including, in particular, section 84(1)) and to paragraph 7A of Schedule 23A to the Taxes Act 1988).”
(3)The amendments made by this paragraph have effect in relation to manufactured interest whenever paid, apart from payments treated under section 737A(5) of ICTA as made before 27 January 2009.
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: