Corporation Tax Act 2009 section 329

Pre-loan relationship and abortive expenses

Section 329 allows a company to obtain tax relief for expenses incurred in connection with a loan relationship or related transaction that it was considering but never actually entered into.

• Expenses incurred in preparing to enter into a loan relationship or related transaction may qualify for tax relief even if the transaction never goes ahead
• The expenses must be connected with entering into the relationship or transaction, or with giving effect to obligations that might arise under it
• The expenses must be of a type that would have qualified as allowable debits had the company actually entered into the loan relationship or transaction
• Where the conditions are met, the expenses are treated for corporation tax purposes as if the company had in fact entered into the relationship or transaction, allowing deductions to the same extent