Corporation Tax Act 2009

452 Exchange gains and losses where loan not on arm's length terms U.K.

(1) This subsection applies if—

(a) a company would be treated as having a debtor relationship in an accounting period if a claim were made under [F1 section 192(1) of TIOPA 2010] in relation to that period, and

(b) for that period there is a connection between that company and the company that would have the corresponding creditor relationship.

(2) If subsection (1) applies, it is assumed that such a claim is made for the purpose of determining the debits or credits to be brought into account for the purposes of this Part in respect of any exchange gains or losses arising in that period in respect of the liability representing that debtor relationship.

[F2 (3) Subsections (4) and (5) apply if, because of a claim made under section 192(1) of TIOPA 2010, or because of the claim that is assumed to be made under subsection (2)—

(a) one company is treated for any purpose as having a debtor relationship, or

(b) more than one company is treated for any purpose as having a debtor relationship represented by the same liability.]

(4) The total amount of the credits brought into account for the purposes of this Part in respect of exchange gains [F3 from that debtor relationship (in a subsection (3)(a) case) or] from those debtor relationships [F4 (in a subsection (3)(b) case)] must not exceed the total amount of the [F5 exchange gains or the proportion of the exchange gains to be left out of account under section 447 by the issuing company in respect of the loan relationship].

(5) The total amount of the debits brought into account for those purposes in respect of exchange losses [F6 from that debtor relationship (in a subsection (3)(a) case) or] from those debtor relationships [F7 (in a subsection (3)(b) case)] must not exceed the total amount of the [F8 exchange losses or the proportion of the exchange losses to be left out of account under section 447 by the issuing company in respect of the loan relationship].

[F9 (5A) In this section “issuing company” is to be construed in accordance with section 191(1)(a) of TIOPA 2010.]

(6) Section 466 (companies connected for an accounting period) applies for the purposes of this section.

Textual Amendments

F1 Words in s. 452(1)(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. 136 (with Sch. 9 paras. 1-9, 22)

F2 S. 452(3) substituted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(2)

F3 Words in s. 452(4) inserted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(3)(a)

F4 Words in s. 452(4) inserted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(3)(b)

F5 Words in s. 452(4) substituted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(3)(c)

F6 Words in s. 452(5) inserted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(4)(a)

F7 Words in s. 452(5) inserted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(4)(b)

F8 Words in s. 452(5) substituted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(4)(c)

F9 S. 452(5A) inserted (with effect in accordance with Sch. 7 para. 12 of the amending Act) by Finance Act 2016 (c. 24), Sch. 7 para. 9(5)

Modifications etc. (not altering text)

C1 Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))