Commentary

D1.715 Loan relationships—Relevant debits and credits

Corporate tax
Corporate tax | Commentary

D1.715 Loan relationships—Relevant debits and credits

Corporate tax | Commentary

Loan relationships—Computation of relevant debits and credits

D1.715 Loan relationships—Relevant debits and credits

For accounting periods beginning on or after 1 January 2016 the amounts that are brought into account in respect of a company's loan relationships are1:

  1.  

    •     profits and losses of the company (whether of a revenue or capital nature2) that arise to it from its loan relationships and related transactions (excluding interest or expenses)

  2.  

    •     interest under those relationships and

  3.  

    •     expenses (see below) incurred by the company under or for the purposes of those relationships and related transactions

Profits and losses for these purposes include exchange gains and losses so arising3.

There is no 'fairly represents' override, unlike the position for accounting periods that began before 1 January 2016. Transitional rules apply where for an accounting period beginning before 1 January 2016 a company had been prevented from bringing a debit or credit into account in computing its loan relationship profits as a result of the application of the 'fairly represents' test. In such cases no debit or credit is to be

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial