Corporation Tax Act 2009 section 331

Company ceasing to be party to loan relationship

Section 331 ensures that when a company stops being a party to a loan relationship, any outstanding debits or credits that have not yet been fully recognised for tax purposes are brought into account at that point.

• When a company ceases to be a party to a loan relationship, all remaining debits and credits must be recognised for corporation tax purposes.
• This acts as a "sweep-up" provision to ensure nothing falls through the gaps when a loan relationship comes to an end.
• It applies where debits or credits relating to the loan relationship have not already been fully brought into account under the normal rules.
• The provision prevents a company from escaping tax charges (or losing relief) simply because the loan relationship has ended before all amounts have been recognised.