Corporation Tax Act 2009 section 295

General rule: profits arising from loan relationships chargeable as income

Section 295 establishes the fundamental rule that all profits a company earns from its loan relationships are subject to corporation tax as income.

• All profits arising to a company from its loan relationships are chargeable to corporation tax as income.
• This is the general rule that applies across the loan relationships regime.
• The profits are taxed under the loan relationships rules in Part 5 of the Corporation Tax Act 2009.
• An exception applies where profits take the form of distributions, which are excluded unless there is a tax avoidance arrangement (section 465).