Corporation Tax Act 2009 section 320A

Amounts recognised in other comprehensive income and not transferred to profit or loss

Section 320A deals with the tax treatment of amounts that have been recognised in other comprehensive income in relation to a loan relationship, but which have not been recycled to profit or loss, when that loan relationship (or part of it) ceases to be recognised in a company's accounts.

• When a loan relationship asset or liability is derecognised and amounts sitting in other comprehensive income are not expected to recycle to profit or loss, those amounts must be brought into account as taxable credits or allowable debits for the period in which derecognition occurs
• Once these amounts have been brought into account under this section, they cannot be brought into account again in a later period, even if they are subsequently transferred to profit or loss in the accounts
• Where only part of a loan relationship asset or liability is derecognised, the rule applies proportionately to the share of other comprehensive income amounts attributable to that part
• When determining which amounts fall within this provision, the accounting policy used in the current period is assumed to have applied in prior periods, unless the accounts themselves adopt a different transitional assumption in accordance with generally accepted accounting practice