Part 7Tax treatment of financing costs and income
CHAPTER 2Application of Part
263Net debt of a company
1
References in section 262 to the “net debt” of a company as at any date are to—
a
the sum of the company’s relevant liabilities as at that date, less
b
the sum of the company’s relevant assets as at that date.
2
The amount determined in accordance with subsection (1) may be a negative amount.
3
For the purposes of this section, a company’s “relevant liabilities” as at any date are the amounts that are disclosed in the balance sheet of the company as at that date in respect of—
a
amounts borrowed (whether by way of overdraft or other short term or long term borrowing),
b
liabilities in respect of finance leases, or
c
amounts of such other description as may be specified in regulations made by the Commissioners.
4
For the purposes of this section, a company’s “relevant assets” as at any date are the amounts that are disclosed in the balance sheet of the company as at that date in respect of—
a
cash and cash equivalents,
b
amounts loaned (whether by way of overdraft or other short term or long term loan),
c
net investments, or net cash investments, in finance leases,
d
securities of Her Majesty’s government or of the government of any other country or territory, or
e
amounts of such other description as may be specified in regulations made by the Commissioners.
5
Expressions used in subsections (3)(a) and (b) and (4)(a) to (c) have the meaning for the time being given by generally accepted accounting practice.