Corporation Tax Act 2009

311Amounts not fully recognised for accounting purposes: introductionU.K.
This section has no associated Explanatory Notes

(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 [F4any 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 [F5creditor relationship and the debtor] relationship.

(4)Condition B is that—

(a)an amount (a “relevant capital contribution”) [F6is at any time] contributed to the company which forms part of its capital for [F7any 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 [F8creditor relationship and the relevant capital] contribution.

[F9(4A)Condition C is that—

(a)the company [F10at any time issues] securities that form part of its capital for [F11any 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)

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)

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)

F13Words in s. 311(5) omitted (27.7.2010) by virtue of Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 1(7)

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)