Corporation Tax Act 2009 section 365

Reduction of impairment loss debits where group relief claimed

Section 365 requires a reduction in impairment loss and release debits on consortium loans when group relief is claimed from the debtor consortium companies during the same period.

• A net consortium debit arises when the total impairment losses and release debits on consortium loans exceed the total credits on debts owed by the debtor consortium companies.
• Where group relief is claimed by a consortium member or its group company from the debtor consortium companies, the impairment and release debits must be reduced.
• The reduction is calculated by apportioning the group relief claimed (capped at the net consortium debit) across the relevant debits in proportion to their respective amounts.
• This section is subject to a further adjustment under section 366 where a credit for a debt release has been brought into account on an amortised cost basis.