Corporation Tax Act 2009

447 Exchange gains and losses on debtor relationships: loans disregarded under [F1 Part 4 of TIOPA 2010] U.K.

(1) Subsections (2) and (3) apply if—

(a) a company has a debtor relationship in an accounting period,

(b) an exchange gain or loss arises in the period in respect of a liability representing the relationship, and

(c) as a result of [F2 section 147(3) or (5) of TIOPA 2010] (provision not at arm's length) the profits and losses of the company are calculated for tax purposes for the period as if—

(i) the loan had not been made, or

(ii) part of the loan had not been made.

(2) In a case where subsection (1)(c)(i) applies, the exchange gain or loss must be be left out of account in determining the credits or debits to be brought into account for the purposes of this Part.

(3) In a case where subsection (1)(c)(ii) applies, a proportion of the exchange gain or loss must be left out of account in determining those credits or debits.

(4) That proportion is the proportion that the part of the loan that is treated as if it had not been made bears to the whole of the loan.

(5) Nothing in [F3 Part 4 of TIOPA 2010] requires the amounts brought into account under this Part in respect of exchange gains or losses from loan relationships to be calculated on the assumption that the arm's length provision had been made instead of the actual provision.

(6) But subsection (5) does not affect the application of subsections (2) and (3) under subsection (1).

(7) In this section “the arm's length provision” and “the actual provision” have the same meaning as in [F4 Part 4 of TIOPA 2010 (see sections 149 and 151 of that Act)].

Textual Amendments

F1 Words in s. 447 title 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. 135(5) (with Sch. 9 paras. 1-9, 22)

F2 Words in s. 447(1)(c) 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. 135(2) (with Sch. 9 paras. 1-9, 22)

F3 Words in s. 447(5) 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. 135(3) (with Sch. 9 paras. 1-9, 22)

F4 Words in s. 447(7) 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. 135(4) (with Sch. 9 paras. 1-9, 22)