Corporation Tax Act 2009 section 379

Persons indirectly standing in the position of creditor

Section 379 extends the late interest rules for connected parties to cover situations where a company indirectly stands in the position of creditor through a chain of loan relationships or money debts.

• A company is treated as a creditor of a loan relationship if it is indirectly connected to that relationship through a series of loan relationships or relevant money debts
• Where the late interest rule in section 373 applies to the debtor relationship, the corresponding creditor relationship is taken to be that of the indirect creditor company
• A "relevant money debt" is a money debt that would qualify as a loan relationship if a company were directly the creditor or debtor
• The effect is that the late interest timing rules cannot be circumvented by routing lending through a chain of intermediaries between connected parties