Corporation Tax Act 2009 section 704

"Creditor relationship" and "debtor relationship"

Section 704 defines the terms "creditor relationship" and "debtor relationship" for the purposes of the derivative contracts rules in Part 7 of the Act.

• A creditor relationship means the company is owed money — it holds the debt as a creditor
• A debtor relationship means the company owes money — it is the borrower
• Both terms carry the same meaning as they do in Part 5 of the Act, which deals with loan relationships
• These definitions are relevant where derivative contracts are connected with a loan relationship or a relevant contract