Corporation Tax Act 2009 section 343

Receiving company using fair value accounting

Section 343 provides a special rule for calculating loan relationship credits and debits when the company receiving new shares or debentures in a cross-border reorganisation uses fair value accounting for the loan relationship concerned, replacing the normal rule in section 342.

• This section overrides section 342 where the receiving company uses fair value accounting for the loan relationship that forms part of the original shares
• The disposal amount is the fair value of the asset representing the loan relationship (or the rights or interest in it) as at the date of the exchange
• Company B is treated as having acquired the loan relationship asset for consideration equal to that fair value disposal amount
• The rules in section 341(5) and (6) regarding when a company is regarded as using fair value accounting also apply here, with references to the receiving company instead of the transferor