[F1330ACompany is not, or has ceased to be, party to loan relationshipU.K.
(1)This section applies if—
(a)amounts in respect of a qualifying relationship are recognised in a company's accounts for an accounting period (“the current period”) as an item of profit or loss even though during all or part of the period the company is not a party to the qualifying relationship,
(b)any of conditions A to D is met, and
(c)in the absence of this section, the credits and debits brought into account by the company for the purposes of this Part or Part 7 for the current period would not include credits or debits representing the whole of those amounts.
(2)In this section “qualifying relationship” means—
(a)a loan relationship, or
(b)a relationship that would be a loan relationship if references in section 302(1) to a company were references to any person.
References in this section to a company being a party to a qualifying relationship are to be read accordingly.
(3)Condition A is that—
(a)the company was a party to the qualifying relationship,
(b)amounts in respect of the qualifying relationship were recognised in the company's accounts as an item of profit or loss when it was a party to the relationship, and
(c)any amounts in respect of the relationship continue to be recognised in those accounts as an item of profit or loss.
(4)Condition B is that the amounts recognised as mentioned in subsection (1)(a) are recognised as a result of a transaction which has the effect of transferring to the company all or part of the risk or reward relating to the qualifying relationship without a corresponding transfer of rights or obligations under the relationship.
(5)Condition C is that the amounts recognised as mentioned in subsection (1)(a) are recognised as a result of a related transaction in relation to a qualifying relationship to which the company was, but has ceased to be, a party.
(6)Condition D is that—
(a)the amounts recognised as mentioned in subsection (1)(a) are recognised because the company may enter into a qualifying relationship or related transaction but has not yet done so, and
(b)the amounts are not expenses to which section 329 applies.
(7)The company must bring credits and debits into account for the purposes of this Part for the accounting period as if the company were a party to the qualifying relationship for the whole of the accounting period.
(8)The amounts that must be brought into account are those amounts in respect of the qualifying relationship that are recognised in the company's accounts for the accounting period as an item of profit or loss (but subject to the provisions of this Part).
(9)This section is subject to sections 330B and 330C.
(10)In this section—
“item of profit or loss” has the meaning it has for accounting purposes;
“recognised” means recognised in accordance with generally accepted accounting practice;
“related transaction”, in relation to a qualifying relationship, is to be read as if the references in section 304(1) and (2) to a loan relationship were to a qualifying relationship.]
Textual Amendments
F1Ss. 330A-330C and cross-heading inserted (with effect in accordance with Sch. 7 Pt. 6 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 7 para. 23