Corporation Tax Act 2009 section 366

Effect where credit for release brought into account on amortised cost basis

Section 366 deals with the tax treatment of debits when a consortium member releases a liability and the debtor consortium company accounts for the release on an amortised cost basis.

• Applies when a company releases a liability under a relevant consortium creditor relationship
• The debtor consortium company must bring an amount into account for the release using an amortised cost basis of accounting
• The release amount is prevented from being treated as an allowable debit for that accounting period
• This ensures the consortium member does not receive a tax deduction matching the credit recognised by the debtor company