Section 359 — Corporation Tax Act 2009: Exclusion of credits on release of connected companies debts during creditor's insolvency

Exclusion of credits on release of connected companies debts during creditor's insolvency 359 1 This section applies if—

a a liability to pay an amount under a company's debtor relationship is released, b the release takes place in an accounting period for which an amortised cost basis of accounting is used in respect of that relationship, c condition A, B, C, D or E in section 357 is met in relation to the company releasing the amount, d immediately before the time when any of those conditions was first met the relationship was a connected companies relationship, and e immediately after that time it was not such a relationship.

2 The company is not required to bring into account a credit in respect of the release for the purposes of this Part.

3 Where the carrying value of a liability representing the debtor relationship has at any time been adjusted as a result of the liability being the hedged item under a designated fair value hedge, this section does not prevent a credit being brought into account for the purposes of this Part in respect of any reversal of that adjustment.