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

Release of connected companies debts during creditor's insolvency

Section 259NEE identifies a specific set of debt relief circumstances that arise when a debt between connected companies is released during the creditor's insolvency, and the companies cease to be connected as a result of that insolvency.

• This section supplements the introductory provisions in section 259NEB on relevant debt relief circumstances and must be read alongside them.
• The debt release must occur in an accounting period where the debtor uses an amortised cost basis of accounting for the loan relationship.
• One of the insolvency-related conditions (A to E) in section 357 of the Corporation Tax Act 2009 must be met in relation to the creditor (referred to as the payer).
• Immediately before any of those insolvency conditions was first met, the debtor and creditor must have been connected companies, and immediately afterwards they must no longer have been connected.

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