Corporation Tax Act 2009 section 486C

Exclusion where return otherwise taxable

Section 486C sets out the circumstances in which the disguised interest rules in Chapter 2A do not apply, because the return from an arrangement is already being taxed or accounted for under other corporation tax provisions.

• The disguised interest chapter does not apply to a return that is already charged to corporation tax as income, or brought into account as income, no later than the time it would be recognised under the disguised interest rules in section 486B.
• The chapter also does not override any specific exclusion for particular credits or debits that applies under the derivative contracts rules (Part 7), the intangible fixed assets rules (Part 8), or the loan relationships rules (Part 5).
• However, where a derivative contract return would be taxed on a chargeable gains basis under section 641, the disguised interest chapter is not disapplied — meaning such returns can still fall within the disguised interest rules.
• If the disguised interest rules cause income to be taxed earlier than it otherwise would be, section 486B(7) ensures that the same income is not taxed a second time under the other provisions.