- Latest available (Revised)
- Point in Time (15/09/2016)
- Original (As enacted)
Point in time view as at 15/09/2016.
There are currently no known outstanding effects for the Finance Act 2010, Paragraph 2.
Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.
2(1)Chapter 6 of Part 5 of CTA 2009 (connected companies relationships: release of debts etc) is amended as follows.U.K.
(2)In section 353(2)(b) (introduction to Chapter), for “except where the release is a deemed release under section 361 or 362” substitute “ subject to some exceptions ”.
(3)In section 358 (exclusion of credits on release of connected companies debts: general)—
(a)in subsection (1)(a), for “a company's debtor relationship is released,” substitute “ a debtor relationship of a company (“D”) is released, and ”,
(b)in subsection (2), for “The company” substitute “ D ” and for “it is a deemed release” substitute
“(a)it is a deemed release, or
(b)it is a release of relevant rights.”, and
(c)at the end insert—
“(4)For the purposes of this section “relevant rights” means rights of a company (“C”) that—
(a)were acquired by C in circumstances that, but for the application of the corporate rescue exception or the debt-for-debt exception, would have resulted in a deemed release under section 361(3), or
(b)were acquired by another company in such circumstances and transferred to C by way of an assignment or assignments.
(5)The amount of the credit that D is required to bring into account in respect of a release of relevant rights is—
(a)the amount of the discount received on the acquisition, less
(b)the sum of any credits brought into account in respect of that amount (whether in the accounting period in which the release takes place or in a previous accounting period) by C or, in a case within subsection (4)(b), by the company that acquired the rights or any company to which the rights were subsequently assigned.
(6)A reference in subsection (5) to the amount of the discount received on the acquisition is to the amount that would have been treated as released under section 361(4) on the acquisition, but for the application of the corporate rescue exception or the debt-for-debt exception.”
(4)In section 361 (acquisition of creditor rights by connected company at undervalue)—
(a)in subsection (1), for paragraph (f) substitute—
“(f)no relevant exception applies.”, and
(b)for subsection (2) substitute—
“(2)In subsection (1) “relevant exception” means—
(a)the corporate rescue exception (see section 361A),
(b)the debt-for-debt exception (see section 361B), or
(c)the equity-for-debt exception (see section 361C).”
(5)After section 361 insert—
(1)For the purposes of section 361, the “corporate rescue exception” applies if—
(a)the acquisition is an arm's length transaction,
(b)there has been a change in the ownership of D at any time in the period beginning one year before, and ending 60 days after, the date of the acquisition,
(c)it is reasonable to assume that, but for the change in ownership, D would, within one year of the date of the change of ownership, have met one of the insolvency conditions, and
(d)it is reasonable to assume that, but for the change in ownership, the acquisition would not have been made.
(2)Subject to subsection (3), section 769 of ICTA (rules for ascertaining change in ownership of company) applies for the purpose of construing a reference in this section to a change in the ownership of a company.
(3)A reference in this section to a change in the ownership of a company, in the case of a company that is a building society, is a reference to—
(a)an amalgamation of two or more building societies under section 93 of the Building Societies Act 1986,
(b)a transfer of all the engagements of one building society to another under section 94 of that Act, or
(c)a transfer of the whole of the business of a building society to a company under section 97 of that Act.
(4)Sections 322(6) and 323 (insolvency conditions) apply for the purposes of this section.
(1)For the purposes of section 361, the “debt-for-debt exception” applies if condition 1 or 2 is met.
(2)Condition 1 is that—
(a)the acquisition is an arm's length transaction,
(b)the rights that are acquired are rights under a loan relationship that is represented by a security (“the old security”),
(c)the consideration given by C for the acquisition consists only of a security (“the new security”) representing a loan relationship to which C is a party as debtor, and
(d)the new security—
(i)has the same nominal value as the old security, and
(ii)at the time of the acquisition, has substantially the same market value as the old security.
(3)Condition 2 is that—
(a)the acquisition is an arm's length transaction,
(b)the rights that are acquired are rights under a loan relationship that is represented by an asset other than a security (“the old unsecured loan”),
(c)the consideration given by C for the acquisition consists only of an asset other than a security (“the new unsecured loan”) representing a loan relationship to which C is a party as debtor, and
(d)the amount of the new unsecured loan, and its terms, are substantially the same as those of the old unsecured loan.
(4)In this section “market value” has the same meaning as in TCGA 1992 (see sections 272 and 273 of that Act).
(5)In determining for the purposes of this section the market value of a security in a case in which the security represents a loan relationship to which section 415 (loan relationships with embedded derivatives) applies, rights or liabilities within subsection (1)(b) of that section are to be treated as comprised in the loan relationship.
(1)For the purposes of section 361 the “equity-for-debt exception” applies if the following two conditions are met.
(2)The first condition is that the acquisition is an arm's length transaction.
(3)The second condition is that the consideration given by C for the acquisition consists only of—
(a)shares forming part of the ordinary share capital of C,
(b)shares forming part of the ordinary share capital of a company connected with C, or
(c)an entitlement to shares within paragraph (a) or (b).”
(6)In section 363—
(a)in the heading, for “and” substitute “ to ”, and
(b)in subsections (1) and (4), for “and” substitute “ to ”.
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: