Section 367 — Corporation Tax Act 2009: Reduction of credits exceeding impairment losses

Reduction of credits exceeding impairment losses 367 1 This section applies if, apart from this section, for any group accounting period—

a the total of the impairment losses and release debits brought into account for that period in respect of relevant consortium creditor relationships by—

i the member company, and ii every group member, is less than b the total credits so brought into account by them in connection with debts owed by the companies which are the debtor consortium companies in respect of those relationships.

2 Those credits are reduced (but not below nil) in accordance with subsection (3).

3 The amount of reduction in the case of each credit is calculated as follows. Step 1 Find the total amount by which the debits in respect of the relationships for previous group accounting periods have been reduced under section 365(4). Step 2 Deduct the total amount by which credits have previously been reduced under this section from the amount found at Step 1. Step 3 Apportion the amount found at Step 2 between the credits in proportion to their respective amounts.