Corporation Tax Act 2009 section 491

Holding coming within section 490: opening valuations

Section 491 establishes how to determine the opening value of a company's holding in an open-ended investment company (OEIC), unit trust scheme or offshore fund when the holding first becomes subject to the loan relationship rules under section 490.

• This section applies where a company holds a relevant holding at the end of one accounting period and the beginning of the next, and section 490 applies for the second period but not the first
• The opening value of the holding at the start of the second period is set at its market value immediately before the end of the first period
• Market value is determined using the general valuation principles under section 272 of the Taxation of Chargeable Gains Act 1992
• This ensures a smooth transition into the loan relationship regime by establishing a fair starting value based on the holding's worth just before the rules take effect