Corporation Tax Act 2009 section 360

Exclusion of credits on reversal of impairments of connected companies debts

Section 360 prevents a company from recognising a taxable credit when an impairment loss on a connected company's debt is reversed, where the original impairment loss was itself excluded from the loan relationships tax rules.

• Where an impairment loss on a connected company debt was blocked from being a tax deduction under section 354, any subsequent reversal of that impairment cannot generate a taxable credit
• This ensures symmetry: if the original write-down gave no tax benefit, the write-back should not create a tax charge
• The rule applies specifically to impairment reversals and does not override the treatment of foreign exchange gains or losses arising on the same debt
• Exchange gains and losses on the debt continue to be brought into account under the loan relationships rules in the normal way