449Exchange gains and losses on creditor relationships: no corresponding debtor relationshipU.K.
(1)This section applies if—
(a)a company has a creditor relationship in an accounting period, and
(b)an exchange gain or loss arises in the period in respect of an asset representing the relationship.
(2)The exchange gain or loss must be left out of account in determining the credits or debits to be brought into account for the purposes of this Part if conditions A and B are met.
(3)Condition A is that the transaction giving rise to the loan is such that it would not have been entered into at all if the parties had been dealing at arm's length.
(4)Condition B is that there is no corresponding debtor relationship.
(5)For the meaning of “corresponding debtor relationship”, see section 450.
(6)This section is subject to section 451 (exception to this section where loan exceeds arm's length amount).