Corporation Tax Act 2009 section 398

Overview of Chapter

Section 398 provides an overview and guide to the organisation of Chapter 12, which contains special corporation tax rules for companies holding particular kinds of securities.

• Chapter 12 sets out special loan relationship rules that apply when a company holds specific types of securities, including index-linked gilts, other gilt-edged securities, deeply discounted securities, funding bonds, securities with embedded derivatives, options, and hybrid capital instruments.
• Index-linked gilt-edged securities and other gilt-edged securities each have their own dedicated sets of rules within the chapter, reflecting the particular tax treatment these government securities require.
• Deeply discounted securities held by or between connected companies and close companies are subject to specific provisions, and further rules for deeply discounted securities held through partnerships are found separately in section 385.
• The chapter also addresses loan relationships containing embedded derivatives, assumptions to be made where options or similar rights apply, and the treatment of amounts payable in respect of hybrid capital instruments.