Corporation Tax Act 2009

377 Party to loan relationship having major interest in other party U.K.

[F1 (1)] The case to which this section applies is where—

(a) a person (“C”) standing in the position of a creditor as respects the loan relationship is a company, F2 ...

(b) there is a time in the actual accrual period when—

(i) the company which has the debtor relationship (“D”) has a major interest in C, or

(ii) C has a major interest in D [F3 and

(c) the condition in subsection (2) is met.]

[F4 (2) The condition is that C is—

(a) resident for tax purposes in a non-qualifying territory at any time in the actual accrual period, or

(b) effectively managed in a non-taxing non-qualifying territory at any such time.

(3) For the purposes of this section—

(a) “non-qualifying territory” has the meaning given by [F5 section 173 of TIOPA 2010],

(b) a non-qualifying territory is “non-taxing” if companies are not under its law liable to tax by reason of domicile, residence or place of management, and

(c) “resident for tax purposes” means liable, under the law of the non-qualifying territory, to tax there by reason of domicile, residence or place of management. ]

Textual Amendments

F1 S. 377(1): s. 377 renumbered as s. 377(1) (with effect in accordance with Sch. 20 para. 9 of the amending Act) by Finance Act 2009 (c. 10), Sch. 20 para. 5(2)

F2 Word in s. 377(1)(a) omitted (with effect in accordance with Sch. 20 para. 9 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 20 para. 5(3)

F3 S. 377(1)(c) and word inserted (with effect in accordance with Sch. 20 para. 9 of the amending Act) by Finance Act 2009 (c. 10), Sch. 20 para. 5(3)

F4 S. 377(2) inserted (with effect in accordance with Sch. 20 para. 9 of the amending Act) by Finance Act 2009 (c. 10), Sch. 20 para. 5(4)

F5 Words in s. 377(3)(a) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 129 (with Sch. 9 paras. 1-9, 22)