Corporation Tax Act 2009 section 65

Deeply discounted securities of close companies: discounts for accounting periods beginning before 1 April 2007

Section 65 prevents double-counting of discount debits on certain deeply discounted securities issued by close companies, where the underlying contract predates 4 March 2005 and has not been materially varied.

• This rule applies to debtor relationships arising from contracts made before 4 March 2005 that have not been varied in any way that affects the terms of the debtor relationship.
• Where a discount debit was already brought into account in an earlier accounting period (one beginning before 1 April 2007, or before the date of any relevant variation if that occurred before 1 April 2007), the same discount cannot generate a further debit under the amended rules introduced by the Finance (No. 2) Act 2005.
• Only variations that actually change the terms of the debtor relationship itself are treated as variations for this purpose; purely administrative or unrelated contract changes are disregarded.
• If the contract was varied before 1 April 2007, the cut-off date for "earlier accounting period" shifts from 1 April 2007 to the date of that variation.