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Corporation Tax Act 2009, Cross Heading: Application of Part 5 to relevant non-lending relationships is up to date with all changes known to be in force on or before 02 September 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.
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(1)If a company has a relevant non-lending relationship—
(a)Part 5 (loan relationships) applies in relation to the relevant matters (see subsections (3) and (5)) as it applies in relation to such matters arising under or in relation to a loan relationship, but
(b)the only credits or debits to be brought into account for the purposes of that Part in respect of the relationship are those relating to those matters.
(2)Accordingly, subject to subsection (1)(b), references in the Corporation Tax Acts to a loan relationship include a reference to a relevant non-lending relationship.
(3)The relevant matters in the case of a relevant non-lending relationship within section 479 are—
(a)interest payable to or by the company in respect of the relevant non-lending relationship,
(b)exchange gains or losses arising to the company as a result of the relationship,
(c)in the case of a debt on which interest is payable to the company, profits (but not losses) arising to the company from any related transaction in respect of the right to receive interest,
(d)in the case of a debt in relation to which an impairment loss [F1or release debit] arises to the company in respect of an unpaid business payment, the [F2 impairment or release,]
(e)in the case of a debt in relation to which a credit in respect of the reversal of an impairment loss arises to the company in respect of a previously unpaid business payment, the reversal [F3and
(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.]
(4)In subsection [F4(3)(d) and (e)] “business payment” has the meaning given in section 479(3).
[F5(4A) In subsection (3)(f) “ relevant deduction ” has the meaning given in section 479(3A). ]
(5)The relevant matters in the case of a relevant non-lending relationship within section 480 are—
(a)the matters referred to in subsection (3),
(b)the discount arising to the company from the money debt,
(c)profits (but not losses) arising to the company from any related transaction,
(d)any impairment arising to the company in respect of the discount, and
(e)any reversal of any such impairment.
(6)Subsection (7) applies if a company—
(a)has a relevant non-lending relationship within section 479 because of a debt on which interest is payable to the company, but
(b)enters into a related transaction in respect of the right to receive interest as a result of which interest is not so payable.
(7)Even though the interest is not payable to the company, for the purpose of bringing credits into account in respect of that or any other related transaction as a result of the application of subsection (3)(c), the company is still treated as having a relevant non-lending relationship within section 479.
(8)Section 480(5) (when discount arises) applies for the purpose of this section as it applies for the purposes of section 480.
Textual Amendments
F1Words in s. 481(3)(d) inserted (22.4.2009 retrospective) by Finance Act 2009 (c. 10), s. 42(9)(a)(12)
F2Words in s. 481(3)(d) substituted (22.4.2009 retrospective) by Finance Act 2009 (c. 10), s. 42(9)(a)(12)
F3S. 481(3)(f) and word inserted (22.4.2009 retrospective) by Finance Act 2009 (c. 10), s. 42(9)(b)(12)
F4Words in s. 481(4) substituted (22.4.2009 retrospective) by Finance Act 2009 (c. 10), s. 42(10)(12)
F5S. 481(4A) inserted (22.4.2009 retrospective) by Finance Act 2009 (c. 10), s. 42(11)(12)
(1)Any credits or debits which—
(a)relate to interest payable under the Tax Acts, and
(b)fall to be brought into account because of this Chapter,
are treated for the purposes of Part 5 as non-trading credits or debits.
(2)The credits to be brought into account for the purposes of that Part in respect of a discount arising from a money debt under a relevant non-lending relationship are to be determined using an amortised cost basis of accounting.
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