Taxation (International and Other Provisions) Act 2010 section 259NED

Release of connected companies debts

Section 259NED defines one specific set of circumstances that qualifies as a "relevant debt relief circumstance" for the hybrid mismatch rules — namely, the release of a debt between connected companies.

• This section works alongside section 259NEB, which provides the introductory framework for identifying relevant debt relief circumstances.
• The debt must be accounted for on an amortised cost basis in the accounting period in which the release takes place.
• The debtor relationship must be a connected companies relationship — meaning the debtor and creditor are connected parties.
• The release must be an actual release of the debt, not a deemed release or a release of relevant rights.