Corporation Tax Act 2010 section 705C

Restriction on debits to be brought into account

Section 705C restricts the amount of non-trading loan relationship debits that a company can bring into account after a change in ownership, by reference to the company's taxable total profits in the period ending with the change.

• After a change in ownership, relevant non-trading debits from loan relationships are restricted for the first post-change accounting period and all subsequent periods.
• The restriction applies where the cumulative total of relevant non-trading debits (Amount A) exceeds the taxable total profits of the accounting period ending with the change in ownership (Amount B).
• Amount A is the sum of the relevant non-trading debits for the current period plus any such debits already brought into account in earlier post-change periods.
• The definition of "relevant non-trading debit" is found in section 730 of the Corporation Tax Act 2010.