Corporation Tax Act 2009 section 433

Transfer of loan relationship at notional carrying value

Section 433 establishes how loan relationships transferred during a cross-border merger are valued for the purpose of calculating taxable credits and debits.

• When a loan relationship asset or liability is transferred during a merger, both parties are treated as having transacted at the notional carrying value
• The notional carrying value is the tax-adjusted carrying value that would have appeared in the transferor's accounts if a period of account had ended immediately before the transfer
• This deemed consideration rule determines the credits and debits brought into account for corporation tax purposes under the loan relationships rules
• This section is subject to section 434, which provides a different rule where the transferor uses fair value accounting