Corporation Tax Act 2009

311 Amounts not fully recognised for accounting purposes: introduction U.K.

(1) Section 312 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 creditor relationship in the period,

[F1 (b) condition A, B[F2 , C or D] is met, and

(c) an amount is not fully recognised for the period in respect of the creditor relationship as a result of the application of generally accepted accounting practice in relation to the creditor relationship and the debtor relationship, contribution[F3 , securities or relevant interest] referred to in the condition that is met.]

(3) Condition A is that—

(a) the company is or is treated as a party to a debtor relationship in [F4 any period], and

(b) an amount is not fully recognised for the period in respect of the debtor relationship as a result of the application of generally accepted accounting practice in relation to the [F5 creditor relationship and the debtor] relationship.

(4) Condition B is that—

(a) an amount (a “relevant capital contribution”) [F6 is at any time] contributed to the company which forms part of its capital for [F7 any 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 [F8 creditor relationship and the relevant capital] contribution.

[F9 (4A) Condition C is that—

(a) the company [F10 at any time issues] securities that form part of its capital for [F11 any 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 creditor relationship and the securities.]

[F12 (4B) Condition D is that, at any time—

(a) the company acquires a relevant interest in another company, a firm or a trust, or

(b) an existing relevant interest of the company in another company, a firm or a trust is varied.]

(5) It does not matter for the purposes of subsection (4) whether the contribution forms part of the company's share capital or other capital F13 ....

[F14 (5A) In this section—

(a) a reference to a relevant interest in a company is to an interest in the company’s shares or other capital,

(b) a reference to a relevant interest in a firm is to an entitlement to share in the profits or capital of the firm, and

(c) a reference to a relevant interest in a trust is to an interest under the trust in any property subject to the trust.]

(6) For the purposes of this section an amount is not fully recognised for a period in respect of a relationship of a company [F15 , a contribution to it or securities issued by it] if—

(a) no amount in respect of the relationship[F16 , 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 relationship[F16 , contribution or securities].

Textual Amendments

F1 S. 311(2)(b) (c) substituted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(2)

F2 Words in s. 311(2)(b) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(2)(a)

F3 Words in s. 311(2)(c) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(2)(b)

F4 Words in s. 311(3)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(3)

F5 Words in s. 311(3)(b) inserted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(3)

F6 Words in s. 311(4)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(4)(a)

F7 Words in s. 311(4)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(4)(b)

F8 Words in s. 311(4)(b) inserted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(4)

F9 S. 311(4A) inserted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(5)

F10 Words in s. 311(4A)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(5)(a)

F11 Words in s. 311(4A)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(5)(b)

F12 S. 311(4B) inserted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(6)

F13 Words in s. 311(5) omitted (27.7.2010) by virtue of Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(7)

F14 S. 311(5A) inserted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(8)

F15 Words in s. 311(6) substituted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(6)(a)

F16 Words in s. 311(6) substituted (with effect in accordance with Sch. 30 para. 2(8)(9) of the commencing Act) by Finance Act 2009 (c. 10) , Sch. 30 para. 2(6)(b)