Corporation Tax Act 2009 section 393

General rules for some debtor relationships

Section 393 establishes the default accounting method and restricts the types of debits that can be recognised for certain debtor loan relationships where the company is the borrower.

• Where a company has a debtor loan relationship that is not within the charge to corporation tax (for example, it does not relate to the company's trade or investment activities), the amortised cost basis of accounting must be used rather than fair value accounting.
• Only debits that represent interest costs or expenses directly incurred in connection with the loan relationship may be brought into account — no other types of debit are permitted.
• Exchange gains and losses on such relationships are excluded from the loan relationships rules, as these are dealt with separately under other provisions.
• This section was amended by the Finance Act 2012 to update cross-references following the rewrite of the corporation tax rules on charitable companies and community amateur sports clubs.

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