C1C2C3C4C5C6C7C9C8Part 5Loan Relationships
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)
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)
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
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)
Pt. 5 modified (30.9.2013) by The BRB (Residuary) Limited (Tax Consequences) Order 2013 (S.I. 2013/2242), arts. 1, 7
Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)
Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Chapter 3The credits and debits to be brought into account: general
Rules differing from generally accepted accounting practice
322Release of debts: cases where credits not required to be brought into account
1
This section applies if—
a
a liability to pay an amount under a company's debtor relationship is released, and
b
the release takes place in an accounting period for which an amortised cost basis of accounting is used in respect of that relationship.
2
The company is not required to bring into account a credit in respect of the release for the purposes of this Part if F3any of conditions A to D is met.
3
Condition A is that the release is part of a statutory insolvency arrangement.
4
Condition B is that the release is F1not a release of relevant rights and is—
a
in consideration of shares forming part of the ordinary share capital of the debtor company, or
b
in consideration of any entitlement to such shares.
F24A
Relevant rights” has the same meaning for the purposes of this section as it has for the purposes of section 358.
5
Condition C is that—
a
the debtor company meets one of the insolvency conditions (see subsection (6)), and
b
the debtor relationship is not a connected companies relationship (see section 348).
F45A
Condition D is that the liability is released in consequence of F5the making of a mandatory reduction instrument or a third country instrument or the exercise of a stabilisation power under Part 1 of the Banking Act 2009.
6
For the purposes of this section a company meets the insolvency conditions if—
a
it is in insolvent liquidation,
b
it is in insolvent administration,
c
it is in insolvent administrative receivership,
d
an appointment of a provisional liquidator is in force in relation to the company under section 135 of the Insolvency Act 1986 (c. 45) or Article 115 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or
e
under the law of a country or territory outside the United Kingdom circumstances corresponding to those mentioned in paragraph (a), (b), (c) or (d) exist.
7
Section 323 applies for the interpretation of subsection (6).
8
For further cases where no credit in respect of the release is to be brought into account, see—
a
section 358 (exclusion of credits on release of connected companies debts: general), and
b
section 359 (exclusion of credits on release of connected companies debts during creditor's insolvency).
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)