Part 14Change in company ownership

F1CHAPTER 5AShell companies: restrictions on relief

Apportionment of amounts

705GMeaning of certain expressions in section 705F

(1)

This section applies for the purposes of the table in section 705F(2).

(2)

For the purposes of column 1 of row 1 of the table, the amount for the actual accounting period of any adjusted non-trading profits from the company's loan relationships is the amount which would be the amount of the profits from those relationships chargeable under section 299 of CTA 2009 (charge to tax on non-trading profits) if, in calculating that amount, amounts for that period within column 1 of row 3 or 4 of the table were disregarded.

(3)

For the purposes of column 1 of row 2 of the table, the amount for the actual accounting period of any adjusted non-trading deficit from the company's loan relationships is the amount which would be the amount of the non-trading deficit from those relationships if, in calculating that amount, amounts for that period within column 1 of row 3 or 4 of the table were disregarded.

(4)

Condition A is that—

(a)

the amount in column 1 of row 3 of the table is determined on an amortised cost basis of accounting, and

(b)

none of the following provisions applies—

(i)

section 373 of CTA 2009 (late interest treated as not accruing until paid in some cases),

(ii)

section 407 of that Act (postponement until redemption of debits for connected companies' deeply discounted securities), or

(iii)

section 409 of that Act (postponement until redemption of debits for close companies' deeply discounted securities).

(5)

Condition B is that—

(a)

the amount in column 1 of row 3 of the table is determined on an amortised cost basis of accounting, and

(b)

any of the provisions mentioned in subsection (4)(b) applies.