Section 352 — Corporation Tax Act 2009: Disregard of related transactions

Disregard of related transactions 352 1 This section applies in an accounting period if—

a section 349 applies in respect of a creditor relationship of a company for the period, and b a related transaction takes place in relation to the relationship in the period.

2 The credits brought into account in respect of the relationship for the period for the purposes of this Part must not be less than they would have been if—

a the transaction had not taken place, and b no amounts had accrued after the transaction took place.

3 The debits brought into account in respect of the loan relationship for the period for the purposes of this Part must not be more than they would have been in that case. 3A Subsections (2) and (3) do not affect the credits or debits to be brought into account for the purposes of this Part in respect of changes in the fair value of the asset that are attributable to changes in the corresponding market rate. 3B Subsection (3A) is subject to section 354 (exclusion of debits for impaired or released connected companies debts). 3C In relation to a debt, “the corresponding market rate” at any time is the lowest rate at which a company of good financial standing might at that time expect to be able to borrow money at arm's length in the currency applicable to the debt, for repayment at the same time as the debt and otherwise on similar terms.

4 Nothing in this section affects the credits or debits to be brought into account for the purposes of this Part in respect of exchange gains or losses arising from a debt.