(January 13, 2015) 

On January 12, 2015 the HMRC published a collection bringing together documents and other material on the taxation of corporate debt and derivative contracts. One of the documents is a draft version of a document titled: “Modernising the taxation of corporate debt and derivative contracts - Draft guidance for the corporate finance manual on the corporate rescue exemption”.

On December 10, 2014 the UK Government published draft legislation to be included in Finance Bill 2015, together with explanatory notes. These include a schedule of amendments to the corporation tax rules on loan relationships in Part 5 of the Corporation Tax Act 2009 (CTA 2009).

New sections 322(5B) and 323A of CTA 2009 will remove the obligation to bring into account a loan relationships credit arising on a release, modification or replacement of debt in certain circumstances where a company is unable to pay its debts.

According to the introduction the provisional guidance explains HMRC’s interpretation of the proposed legislation as published on December 10, 2014 and it is published to help companies and their advisers consider the application of the new legislation until HMRC’s Corporate Finance Manual (CFM) is amended following the enactment of the legislation. Furthermore comment is invited on this draft guidance and the final text incorporated into the CFM will take account of comments received and any amendments to the draft clauses.

For further information click here to be forwarded to the collection as published by the HMRC. In this collection you will find a.o. a link to the draft guidance.

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