Corporation Tax Act 2009 section 399

Basic rules

Section 399 sets out the basic corporation tax rules for companies holding index-linked gilt-edged securities, requiring the use of fair value accounting and defining key terms.

• Where a company's loan relationship takes the form of an index-linked gilt, fair value accounting must be used to determine the amounts brought into account for corporation tax purposes.
• Index-linked gilt-edged securities are UK government bonds whose payment amounts are determined wholly or partly by reference to a prices index published by the Statistics Board (the body responsible for the Retail Prices Index and Consumer Prices Index).
• The "relevant prices index" for any particular index-linked gilt is the specific prices index used to determine the payment amounts under that security.
• Further adjustments to the fair value amounts are required under separate provisions dealing with changes in the relevant index, and special rules apply to insurance companies.