Corporation Tax Act 2009 section 336

Transfers of loans on group transactions

Section 336 specifies when the continuity of treatment rules apply to transfers of loan relationships between companies within the same group.

• Where a group transaction (or series of transactions) results in one company replacing another as party to a loan relationship, the continuity rules apply so that the transfer is tax-neutral
• Both the transferor and the transferee must be members of the same group and within the charge to corporation tax in respect of the transaction
• A series of transactions that achieves the same effect as a direct related transaction between two group members is also caught, provided each company has been a group member at some point during the series
• The continuity rules do not apply where the loan asset being transferred is held for the purposes of long-term insurance business, and for overseas life insurance companies, transfers of non-UK assets are excluded from this restriction