Corporation Tax Act 2010 section 938K

Trading income

Section 938K clarifies how references to loan relationship and derivative contract debits and credits in the group mismatch scheme rules also cover amounts treated as trading income or expenses.

• This section applies to the group mismatch scheme provisions in Part 21ZA of CTA 2010.
• Where the rules refer to amounts brought into account (or not) as debits or credits under the loan relationships code (Part 5 of CTA 2009) or the derivative contracts code (Part 7 of CTA 2009), those references have an extended meaning.
• The extended meaning includes amounts that are treated as trading expenses or trading receipts under Part 3 of CTA 2009, by virtue of sections 297 and 573 of CTA 2009, which require trading debits and credits to be brought into account as part of the trade profit calculation.
• This ensures there is no gap in coverage where loan relationship or derivative contract amounts flow through to trading profits rather than being accounted for separately.