Part 5 U.K. Loan Relationships

Modifications etc. (not altering text)

C1 Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)

C2 Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)

C3 Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)

C4 Pt. 5 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 2; S.I. 2011/2576, art. 5

C5 Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

Chapter 1 U.K. Introduction

How profits and deficits from loan relationships are dealt with U.K.

298 Meaning of trade and purposes of trade U.K.

(1) For the purposes of this Part a company is taken to be a party to a creditor relationship for the purposes of a trade it carries on only if it is a party to the relationship in the course of activities forming an integral part of the trade.

(2) For the meaning of “creditor relationship”, see section 302(5).

(3) For the purposes of this Part activities carried on by a company in the course of—

(a) any mutual trading, [F1 or]

(b) any mutual insurance or other mutual business which is not life assurance business, F2 ...

F2 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

are treated as not constituting the whole or any part of a trade.

(4) Subsection (3) applies for the purposes of any other relevant enactment as it applies for the purposes of this Part.

(5) In subsection (4) “relevant enactment” means so much of any enactment as contains provision by reference to which amounts are to be brought into account for the purposes of this Part.

[F3 (6) In the case of activities carried on by a company in the course of any basic life assurance and general annuity business, provision corresponding to that made by subsection (3) is made by section 88 of FA 2012 for the purpose of applying the I - E rules.]

Textual Amendments

F1 Word in s. 298(3)(a) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 147(2)(a)

F2 S. 298(3)(c) and the word immediately preceding it omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 16 para. 147(2)(b)

F3 S. 298(6) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 147(3)