Commentary

D7.533 Loan relationships

Corporate tax
Corporate tax | Commentary

D7.533 Loan relationships

Corporate tax | Commentary

D7.533 Loan relationships

The rules in this division apply for accounting periods beginning before 1 January 2013. For accounting periods beginning on or after 1 January 2013 see Division D7.4.

The general rules for the taxation of loan relationships in CTA 2009, Pt 5 (see Division D1.7) apply to the calculation of BLAGAB I-E profits of life insurance companies with some modifications. Notwithstanding the fact that an insurance company is party to its loan relationships as part of its insurance trade, any credits and debits referable to BLAGAB are brought into account as non-trading debits or credits1.

Whenever it is necessary to determine what part of any debit or credit arising from a creditor loan relationship of the company is referable to a particular category of business, the apportionment rules in ICTA 1988, s 432A are used2.

The rules for continuity of treatment for transfers of loan relationships between group companies3 (see D1.767) are disapplied for transfers into or out of a life insurer's long-term insurance fund4.

When the loan relationship rules were introduced in 1996, HMRC were of the view

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