Corporation Tax Act 2009 section 412

Persons indirectly standing in the position of creditor

Section 412 extends the deeply discounted securities rules in sections 407 and 409 to cover situations where a person stands indirectly in the position of creditor through a chain of loan relationships or money debts.

• A person is treated as a creditor for the purposes of the connected companies and close companies deeply discounted securities rules if they indirectly hold that position through a series of loan relationships or relevant money debts
• Where a company is treated as an indirect creditor under the connected companies rule in section 407, the corresponding creditor relationship is taken to be that company's own creditor relationship in the chain
• Where a person is treated as an indirect creditor under the close companies rule in section 409, the corresponding creditor relationship for the purposes of the exceptions in section 410 is taken to be that person's own creditor relationship in the chain
• A "relevant money debt" is defined as a money debt that would qualify as a loan relationship if a company directly stood in the position of creditor or debtor