Section 311 — Corporation Tax Act 2009: Amounts not fully recognised for accounting purposes: introduction

Amounts not fully recognised for accounting purposes: introduction 311 1 Section 312 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 creditor relationship in the period, and b as a result of tax avoidance arrangements to which the company is at any time a party, an amount is (in accordance with generally accepted accounting practice) not fully recognised for the period in respect of the creditor relationship. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 For the purposes of this section and section 312 an amount is not fully recognised for a period in respect of a relationship of a company ... if—

a no amount in respect of the relationship ... 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 relationship ....

7 For the purposes of this section arrangements are “tax avoidance arrangements” if the main purpose, or one of the main purposes, of any party to the arrangements, in entering into them, is to obtain a tax advantage.

8 In subsection (7) “ arrangements ” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

9 For the purposes of this section a company is to be treated as a party to a creditor relationship even though it has disposed of its rights under the relationship to another person—

a under a repo or stock lending arrangement, or b under a transaction which is treated as not involving any disposal as a result of section 26 of TCGA 1992 (mortgages and charges not to be treated as disposals).