Section 415 — Corporation Tax Act 2009: Loan relationships with embedded derivatives

Loan relationships with embedded derivatives 415 1 This section applies if in accordance with generally accepted accounting practice a company treats the rights and liabilities under a loan relationship to which it is a party as divided between—

a rights and liabilities under a loan relationship (“the host contract”),

and b rights and liabilities under one or more derivative financial instruments or equity instruments.

2 The company is treated for the purposes of this Part as a party to a loan relationship whose rights and liabilities consist only of those of the host contract.

3 For the corresponding treatment of the rights and liabilities within subsection (1)(b), see section 585 (loan relationships with embedded derivatives).