Part 6Relationships treated as loan relationships etc
Chapter 2Relevant non-lending relationships
Application of Part 5 to relevant non-lending relationships
481Application of Part 5 to relevant non-lending relationships
1
If a company has a relevant non-lending relationship—
a
Part 5 (loan relationships) applies in relation to the relevant matters (see subsections (3) and (5)) as it applies in relation to such matters arising under or in relation to a loan relationship, but
b
the only credits or debits to be brought into account for the purposes of that Part in respect of the relationship are those relating to those matters.
2
Accordingly, subject to subsection (1)(b), references in the Corporation Tax Acts to a loan relationship include a reference to a relevant non-lending relationship.
3
The relevant matters in the case of a relevant non-lending relationship within section 479 are—
a
interest payable to or by the company in respect of the relevant non-lending relationship,
b
exchange gains or losses arising to the company as a result of the relationship,
c
in the case of a debt on which interest is payable to the company, profits (but not losses) arising to the company from any related transaction in respect of the right to receive interest,
d
in the case of a debt in relation to which an impairment loss arises to the company in respect of an unpaid business payment, the impairment, and
e
in the case of a debt in relation to which a credit in respect of the reversal of an impairment loss arises to the company in respect of a previously unpaid business payment, the reversal.
4
In subsection (3) “business payment” has the meaning given in section 479(3).
5
The relevant matters in the case of a relevant non-lending relationship within section 480 are—
a
the matters referred to in subsection (3),
b
the discount arising to the company from the money debt,
c
profits (but not losses) arising to the company from any related transaction,
d
any impairment arising to the company in respect of the discount, and
e
any reversal of any such impairment.
6
Subsection (7) applies if a company—
a
has a relevant non-lending relationship within section 479 because of a debt on which interest is payable to the company, but
b
enters into a related transaction in respect of the right to receive interest as a result of which interest is not so payable.
7
Even though the interest is not payable to the company, for the purpose of bringing credits into account in respect of that or any other related transaction as a result of the application of subsection (3)(c), the company is still treated as having a relevant non-lending relationship within section 479.
8
Section 480(5) (when discount arises) applies for the purpose of this section as it applies for the purposes of section 480.