Corporation Tax Act 2009 section 306

Overview of Chapter

Section 306 provides an overview of Chapter 3, which contains the general rules governing how credits and debits from loan relationships are brought into account for corporation tax purposes, and signposts further detailed rules found in other chapters.

• Chapter 3 sets out the general rules for determining which credits and debits a company must bring into account in respect of its loan relationships, including the matters giving rise to those amounts.
• Generally accepted accounting practice (GAAP) is the starting point for calculating loan relationship credits and debits, with specific provisions applying where a company's accounts do not comply with GAAP or where the company changes its basis of accounting.
• The chapter also covers several areas where the tax treatment departs from or supplements standard accounting, including exchange gains and losses, pre-loan relationship and abortive expenses, amounts recognised after a company ceases to be party to a loan relationship, and deemed assignments when a company moves its residence or operations abroad.
• Additional rules for specific situations — such as group transfers, connected company relationships, partnerships, insurance companies, particular types of securities, European cross-border transactions, and tax avoidance — are found in Chapters 4 to 15 of Part 5.