Corporation Tax Act 2009 section 367

Reduction of credits exceeding impairment losses

Section 367 provides a mechanism to reduce credits on consortium loan relationships where those credits exceed the total impairment losses and release debits for a group accounting period, compensating for debit restrictions applied in earlier periods.

• Where total credits on consortium loan relationships exceed the total impairment losses and release debits for a group accounting period, the credits must be reduced
• The reduction is calculated by reference to the cumulative amount by which debits were restricted in previous group accounting periods under section 365
• Any amounts by which credits have already been reduced under this section in earlier periods are deducted from the available reduction amount
• The remaining reduction is apportioned between the individual credits in proportion to their respective amounts, but no credit can be reduced below nil