Corporation Tax Act 2009 section 353

Introduction to Chapter

Section 353 introduces the chapter dealing with special tax rules that apply to impairment losses and debt releases on loan relationships between connected companies.

• Sections 354 to 357 generally prevent a lending company from claiming tax deductions (debits) for impairment losses or debt releases on loans to connected companies, though some exceptions apply
• Sections 358 to 360 generally prevent a borrowing company from being taxed on credits arising when a connected company releases a debt or reverses an impairment, again with certain exceptions
• Sections 361 to 363 contain anti-avoidance rules that treat a debt release as occurring when an impaired debt is acquired by a connected company at undervalue, to prevent circumvention of the credit exclusion rules
• The definition of whether companies are "connected" for the purposes of sections 354 to 360 is found in section 466, while the connected company test for sections 361 and 362 is set out separately in section 363