Corporation Tax Act 2009 section 450

Meaning of "corresponding debtor relationship"

Section 450 defines what constitutes a "corresponding debtor relationship" for the purposes of the anti-avoidance rule in section 449 concerning exchange gains and losses on creditor relationships.

• A corresponding debtor relationship is a debtor relationship that mirrors the creditor relationship referred to in section 449 and satisfies two conditions (A and B)
• Condition A requires that exchange gains on the debtor side would produce taxable credits matching, in both nature and amount, the deductible debits that would arise from exchange losses on the creditor relationship
• Condition B requires that exchange losses on the debtor side would produce deductible debits matching, in both nature and amount, the taxable credits that would arise from exchange gains on the creditor relationship
• When testing whether these matching credits and debits exist, any statutory exclusions for certain exchange gains and losses under section 328(3) to (7) are disregarded