Section 338 — Corporation Tax Act 2009: Meaning of company replacing another as party to loan relationship

Meaning of company replacing another as party to loan relationship 338 1 References in this Chapter to one company (“A”) replacing another company (“B”) as a party to a loan relationship include references to A becoming a party to a loan relationship which—

a confers rights within subsection (2),

b imposes obligations within subsection (2), or c both confers such rights and imposes such obligations.

2 Rights or obligations are within this subsection if they are equivalent to those of B under a loan relationship to which B has previously ceased to be a party.

3 For the purposes of subsection (2), A's rights under a creditor relationship are equivalent to rights under another creditor relationship if each set of rights gives the holder of an asset representing the relationship in question—

a the same rights against the same persons as to capital, interest and dividends, and b the same remedies to enforce those rights.

4 For the purposes of subsection (3), any difference in—

a the total nominal amounts of the assets representing each relationship, b the form in which they are held, or c the way in which they can be transferred, is ignored.

5 For the purposes of subsection (2), A's obligations under a debtor relationship are equivalent to obligations under another debtor relationship if each set of obligations subjects the holder of the liability representing the relationship in question to—

a the same obligations to the same persons as to capital, interest and dividends, and b the same remedies to enforce those obligations.

6 For the purposes of subsection (5), any difference in—

a the total nominal amounts of the assets representing the creditor relationship corresponding to each relationship, b the form in which those assets are held, or c the way in which they can be transferred, is ignored.