Corporation Tax Act 2009

[F1 599A Amounts not fully recognised for accounting purposes: introduction U.K.

(1) Section 599B applies for the purpose of determining the credits and debits which a company is to bring into account for a period for the purposes of this Part in the following case.

(2) The case is where—

(a) the company is, or is treated as, a party to a derivative contract in the period,

(b) condition A[F2 , B or C] is met, and

(c) an amount is not fully recognised for the period in respect of the contract as a result of the application of generally accepted accounting practice in relation to the contract and the contribution[F3 , securities or relevant interest] referred to in the condition that is met.

(3) Condition A is that—

(a) an amount (a “relevant capital contribution”) [F4 is at any time] contributed to the company which forms part of its capital for [F5 any period], and

(b) an amount is not fully recognised for the period in respect of the relevant capital contribution as a result of the application of generally accepted accounting practice in relation to the derivative contract and the [F6 contribution].

(4) It does not matter for the purposes of subsection (3) whether the contribution forms part of the company's share capital or other capital F7 ....

(5) Condition B is that—

(a) the company [F8 at any time issues] securities that form part of its capital for [F9 any period], and

(b) an amount is not fully recognised for the period in respect of the securities as a result of the application of generally accepted accounting practice in relation to the derivative contract and the securities.

[F10 (5A) Condition C is that, at any time—

(a) the company acquires a relevant interest in another company, a firm or a trust, or

(b) an existing relevant interest of the company in another company, a firm or a trust is varied.

(5B) In this section—

(a) a reference to a relevant interest in a company is to an interest in the company’s shares or other capital,

(b) a reference to a relevant interest in a firm is to an entitlement to share in the profits or capital of the firm, and

(c) a reference to a relevant interest in a trust is to an interest under the trust in any property subject to the trust.]

(6) For the purposes of this section an amount is not fully recognised for a period in respect of a contract of a company, a contribution to it or securities issued by it if—

(a) no amount in respect of the contract, contribution or securities is recognised in determining its profit or loss for the period, or

(b) an amount is so recognised in respect of only part of the contract, contribution or securities.]

Textual Amendments

F1 Ss. 599A, 599B inserted (with effect in accordance with Sch. 30 para. 3(3)(4) of the amending Act) by Finance Act 2009 (c. 10), Sch. 30 para. 3(1)

F2 Words in s. 599A(2)(b) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(2)(a)

F3 Words in s. 599A(2)(c) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(2)(b)

F4 Words in s. 599A(3)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(3)(a)

F5 Words in s. 599A(3)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(3)(b)

F6 Word in s. 599A(3)(b) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(4)

F7 Words in s. 599A(4) omitted (27.7.2010) by virtue of Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(5)

F8 Words in s. 599A(5)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(6)(a)

F9 Words in s. 599A(5)(a) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(6)(b)

F10 S. 599A(5A)(5B) inserted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 5 para. 3(7)