Corporation Tax Act 2009 section 312

Determination of credits and debits where amounts not fully recognised

Section 312 sets out how a company must calculate its tax credits and debits when loan relationship amounts are not fully recognised in its accounts, ensuring that the full economic substance of the transaction is brought into the tax computation.

• Where a loan relationship amount is not fully recognised in the accounts, the company must assume the full amount is recognised when calculating taxable credits and debits
• No debits may be brought into account for the creditor relationship that triggered these rules, and debits on related debtor relationships cannot exceed the credits on related creditor relationships
• If the company is already accounting for credits or debits on the same loan relationship, the additional amounts under this section must be calculated on the same accounting basis
• In all other cases, the additional credits and debits must be calculated using the amortised cost basis of accounting