|
| |
|
363 | Companies connected for sections 361 and 362 |
| |
(1) | For the purposes of sections 361 and 362 there is a connection between two |
| |
companies at any time if condition A or B is met at that time. |
| |
(2) | Condition A is that one company has control of the other. |
| |
(3) | Condition B is that both companies are under the control of the same person |
| 5 |
(but see subsection (6)). |
| |
(4) | For the purposes of sections 361 and 362 there is a connection between two |
| |
companies in a period of account if there is a connection between them (within |
| |
subsection (1)) at any time in the period. |
| |
(5) | Section 472 (meaning of “control”) applies for the purposes of this section. |
| 10 |
(6) | Condition B is not taken to be met just because two companies have been under |
| |
| |
| |
(b) | a Minister of the Crown, |
| |
(c) | a government department, |
| 15 |
(d) | a Northern Ireland department, |
| |
(e) | a foreign sovereign power, or |
| |
(f) | an international organisation. |
| |
(7) | Section 468 (connection between companies to be ignored in some |
| |
circumstances) applies for the purposes of this section as it applies for the |
| 20 |
purposes of the provisions which apply section 466, taking references in |
| |
sections 468 and 469 to the accounting period as references to the period of |
| |
| |
(8) | For the meaning of “international organisation”, see section 476(2) and (3). |
| |
| 25 |
Group relief claims involving impaired or released consortium debts |
| |
364 | Introduction to Chapter |
| |
(1) | This Chapter applies if— |
| |
(a) | there is (or was) a relevant consortium creditor relationship (see |
| |
| 30 |
| |
(i) | an impairment loss is or has been brought into account for the |
| |
purposes of this Part for any group accounting period by the |
| |
| |
(ii) | a debit in respect of a release of liability under the relationship |
| 35 |
is or has been so brought into account. |
| |
(2) | For the purposes of this Chapter a relationship is a relevant consortium |
| |
creditor relationship if— |
| |
(a) | it is a creditor relationship of— |
| |
(i) | a company (the “member company”), which is a member of a |
| 40 |
consortium by which a consortium company is owned, or |
| |
|
| |
|
| |
|
(ii) | a company (a “group member”) which is a member of the same |
| |
group of companies as the member company but is not itself a |
| |
member of the consortium, and |
| |
(b) | the consortium company or, if that company is a holding company, a |
| |
consortium company which is a subsidiary of that company is (or was) |
| 5 |
the debtor (the “debtor consortium company”). |
| |
(3) | The provisions of this Chapter— |
| |
(a) | reduce debits for impairment losses and release debits under relevant |
| |
consortium creditor relationships where an amount surrendered as |
| |
group relief by the consortium company is claimed by a member |
| 10 |
company or group member (see section 365), |
| |
(b) | provide for a corresponding reduction in credits in respect of such |
| |
relationships where a reduction within paragraph (a) has occurred (see |
| |
| |
(c) | reduce claims for group relief where debits within paragraph (a) for |
| 15 |
earlier group accounting periods exceed reductions within paragraph |
| |
(b) (see section 368), and |
| |
(d) | provide for such claims to be carried forward where they exceed such |
| |
debits (see section 369). |
| |
(4) | In this Chapter “release debit” means a debit in respect of a release of liability |
| 20 |
under a relevant consortium creditor relationship. |
| |
(5) | If section 403C of ICTA (amount of relief in consortium cases) applies, effect |
| |
must be given to that section before effect is given to this Chapter. |
| |
(6) | Expressions defined in this section have the same meaning in the other |
| |
provisions of this Chapter, and sections 370 and 371 also apply for the |
| 25 |
interpretation of this Chapter. |
| |
(7) | For the meaning of “impairment loss” see section 476(1). |
| |
365 | Reduction of impairment loss debits where group relief claimed |
| |
(1) | This section applies for any group accounting period for which there is a net |
| |
| 30 |
(2) | For the purposes of this Chapter there is a net consortium debit for a group |
| |
| |
(a) | the total of the impairment losses and release debits brought into |
| |
account for that period in respect of relevant consortium creditor |
| |
| 35 |
(i) | the member company, and |
| |
| |
| |
(b) | the total credits so brought into account by them in connection with |
| |
debts owed by the companies which are the debtor consortium |
| 40 |
companies in respect of those relationships. |
| |
(3) | The net consortium debit is equal to that excess. |
| |
(4) | If there is a claim for that group accounting period by the member company or |
| |
a group member for group relief in respect of an amount which may be |
| |
surrendered as group relief by the debtor consortium companies, the debits |
| 45 |
|
| |
|
| |
|
brought into account in respect of the impairment losses and the release debits |
| |
mentioned in subsection (2)(a) are reduced. |
| |
(5) | The amount of reduction in the case of each of the debits referred to in |
| |
subsection (4) (“the relevant debits”) is calculated as follows. |
| |
| 5 |
| Find the total amount which— |
| |
(a) | may be surrendered as group relief by the debtor consortium |
| |
| |
(b) | is claimed as group relief for the group accounting period by the |
| |
member company or any group member. |
| 10 |
| |
| If the amount found at Step 1 does not exceed the net consortium debit, |
| |
apportion the amount found at Step 1 between the relevant debits in |
| |
proportion to their respective amounts. |
| |
| If the amount found at Step 1 exceeds the net consortium debit, apportion so |
| 15 |
much of the amount found at Step 1 as does not exceed it between the relevant |
| |
debits in proportion to their respective amounts. |
| |
(6) | This section is subject to section 366. |
| |
366 | Effect where credit for release brought into account on amortised cost basis |
| |
(1) | This section applies if— |
| 20 |
(a) | a company releases liability under a relevant consortium creditor |
| |
relationship of the company (“the release amount”), and |
| |
(b) | the debtor consortium company brings into account an amount in |
| |
respect of the release for any accounting period in accordance with an |
| |
amortised cost basis of accounting. |
| 25 |
(2) | An amount equal to the release amount is treated for the purposes of this |
| |
Chapter as not being a debit brought into account for that period in relation to |
| |
the relevant consortium creditor relationship. |
| |
367 | Reduction of credits exceeding impairment losses |
| |
(1) | This section applies if, apart from this section, for any group accounting |
| 30 |
| |
(a) | the total of the impairment losses and release debits brought into |
| |
account for that period in respect of relevant consortium creditor |
| |
| |
(i) | the member company, and |
| 35 |
| |
| |
(b) | the total credits so brought into account by them in connection with |
| |
debts owed by the companies which are the debtor consortium |
| |
companies in respect of those relationships. |
| 40 |
(2) | Those credits are reduced (but not below nil) in accordance with subsection (3). |
| |
(3) | The amount of reduction in the case of each credit is calculated as follows. |
| |
|
| |
|
| |
|
| |
| Find the total amount by which the debits in respect of the relationships for |
| |
previous group accounting periods have been reduced under section 365(4). |
| |
| |
| Deduct the total amount by which credits have previously been reduced under |
| 5 |
this section from the amount found at Step 1. |
| |
| |
| Apportion the amount found at Step 2 between the credits in proportion to |
| |
their respective amounts. |
| |
368 | Reduction of claims where there are earlier net consortium debits |
| 10 |
(1) | This section applies if— |
| |
(a) | for any group accounting period there is a claim by the member |
| |
company or a group member for group relief in respect of an amount |
| |
which may be surrendered as group relief by debtor consortium |
| |
| 15 |
(b) | the total amount of the net consortium debits for earlier group |
| |
accounting periods in respect of the relevant consortium creditor |
| |
relationships exceeds any reductions in respect of those debits falling to |
| |
be made under section 365(4). |
| |
(2) | In this section that excess is referred to as “the unreduced debits amount”. |
| 20 |
| |
(a) | the claim is the only claim for that period, and |
| |
(b) | it exceeds the unreduced debits amount, |
| |
| the claim is reduced by the unreduced debits amount. |
| |
| 25 |
(a) | the claim is not the only claim for that period, and |
| |
(b) | the total of the claims exceeds the unreduced debits amount, |
| |
| the claim is reduced by the same proportion of the unreduced debits amount |
| |
as the claim bears to that total. |
| |
(5) | In any other case, the claim is reduced to nil. |
| 30 |
369 | Carry forward of claims where there are no net consortium debits |
| |
(1) | This section applies if for any group accounting period there is— |
| |
(a) | a claim by the member company or a group member for group relief in |
| |
respect of an amount which may be surrendered as group relief by |
| |
debtor consortium companies (as reduced under section 368, if it |
| 35 |
| |
(b) | no net consortium debit in respect of the relevant consortium creditor |
| |
| |
(2) | The claim (as so reduced) is carried forward and treated for the purposes of |
| |
| 40 |
(a) | as increasing any such claim for group relief made by the claimant |
| |
company for its next accounting period, or |
| |
|
| |
|
| |
|
(b) | if apart from this subsection there would be no such claim, as being |
| |
| |
370 | Group accounting periods |
| |
(1) | In this Chapter “group accounting period” means— |
| |
(a) | any accounting period of the member company beginning on or after 1 |
| 5 |
| |
(b) | any accounting period of a group member which— |
| |
(i) | begins on or after that date, and |
| |
(ii) | corresponds to such an accounting period of the member |
| |
| 10 |
(2) | Any such accounting period of the member company and any such |
| |
corresponding accounting periods of group members are treated for the |
| |
purposes of this Chapter as being the same accounting period. |
| |
(3) | For the purposes of this Chapter an accounting period of a group member |
| |
corresponds to an accounting period of the member company if condition A, B |
| 15 |
| |
(4) | Condition A is that the periods coincide. |
| |
(5) | Condition B is that the accounting period of the member company includes |
| |
more than half of the accounting period of the group member. |
| |
| 20 |
(a) | the accounting period of the member company includes part of the |
| |
accounting period of the group member, and |
| |
(b) | the remainder of that period is not within any accounting period of the |
| |
| |
| 25 |
| |
“consortium company” means a company within section 402(3)(a), (b) or |
| |
(c) of ICTA (surrender of relief between members of consortia), |
| |
“debtor consortium company” has the same meaning as in section 364 (see |
| |
| 30 |
“group accounting period” is to be read in accordance with section 370, |
| |
“group member” has the same meaning as in section 364 (see section |
| |
| |
“group relief” has the meaning given by section 402(1) of ICTA, |
| |
“holding company” means a company within section 402(3)(c) of ICTA, |
| 35 |
“member”, in relation to a consortium, has the same meaning as in |
| |
Chapter 4 of Part 10 of ICTA (group relief), |
| |
“member company” has the same meaning as in section 364 (see section |
| |
| |
“net consortium debit” is to be read in accordance with section 365(2) and |
| 40 |
| |
“relevant consortium creditor relationship” is to be read in accordance |
| |
| |
|
| |
|
| |
|
“subsidiary”, in relation to a company which is a holding company, |
| |
means a company which is within section 402(3)(b) of ICTA by |
| |
reference to that holding company. |
| |
(2) | Any reference in this Chapter to a company being owned by a consortium is to |
| |
be read in accordance with section 413(6) of ICTA. |
| 5 |
(3) | Any reference in this Chapter to two companies being members of the same |
| |
group of companies is a reference to those companies being members of the |
| |
same group of companies for the purposes of Chapter 4 of Part 10 of ICTA |
| |
(group relief) (see section 413(3)(a) of that Act). |
| |
| 10 |
Connected parties relationships: late interest |
| |
372 | Introduction to Chapter |
| |
(1) | This Chapter makes provision about the debits to be brought into account for |
| |
the purposes of this Part in cases where certain conditions relating to interest |
| |
that is not paid or is paid late are met and there is a connection between the |
| 15 |
parties to the loan relationship. |
| |
(2) | For those conditions and the rule that applies in those cases, see section 373 |
| |
(late interest treated as not accruing until paid in some cases). |
| |
(3) | For the kinds of connections where the rule applies, see— |
| |
(a) | section 374 (connection between debtor and person standing in |
| 20 |
| |
(b) | section 375 (loans to close companies by participators etc), |
| |
(c) | section 377 (party to loan relationship having major interest in other |
| |
| |
(d) | section 378 (loans by trustees of occupational pension schemes). |
| 25 |
(4) | For the meaning of “standing in the position of a creditor” in this Chapter, see |
| |
section 379(1) (persons indirectly standing in the position of creditor). |
| |
373 | Late interest treated as not accruing until paid in some cases |
| |
(1) | Debits relating to interest payable under a company’s debtor relationship are |
| |
to be brought into account for the purposes of this Part on the assumption that |
| 30 |
the interest does not accrue until it is paid if— |
| |
(a) | conditions A and B are met, and |
| |
| |
(2) | Condition A is that the interest is not paid within the period of 12 months |
| |
following the end of the accounting period in which it would be treated as |
| 35 |
accruing apart from subsection (1). |
| |
(3) | Condition B is that credits representing the full amount of the interest are not |
| |
brought into account for the purposes of this Part in respect of the |
| |
corresponding creditor relationship for any accounting period. |
| |
(4) | For the meaning of “corresponding creditor relationship” in cases where |
| 40 |
persons indirectly stand in the position of creditor, see section 379(2). |
| |
|
| |
|
| |
|
(5) | References in this Chapter to “the actual accrual period” are references to the |
| |
accounting period in which the interest would be treated as accruing apart |
| |
| |
374 | Connection between debtor and person standing in position of creditor |
| |
(1) | The case to which this section applies is where there is for the actual accrual |
| 5 |
period a connection between— |
| |
(a) | the company which has the debtor relationship, and |
| |
(b) | a company standing in the position of creditor as respects the loan |
| |
| |
(2) | Section 466 (companies connected for an accounting period) applies for the |
| 10 |
purposes of this section. |
| |
375 | Loans to close companies by participators etc |
| |
(1) | The case to which this section applies is where— |
| |
(a) | there is a time in the actual accrual period when the close company |
| |
| 15 |
(b) | neither the CIS-based close company conditions nor the CIS limited |
| |
partnership conditions are met. |
| |
(2) | The close company conditions are that— |
| |
(a) | the company which has the debtor relationship (“D”) is a close |
| |
| 20 |
(b) | a person (“C”) standing in the position of creditor as respects the loan |
| |
| |
| |
(ii) | the associate of a person who is participator in D, |
| |
(iii) | a company of which a participator in D has control, |
| 25 |
(iv) | a company in which a participator in D has a major interest, |
| |
(v) | a person who controls a company which is a participator in D, |
| |
(vi) | the associate of a person within sub-paragraph (v), or |
| |
(vii) | a company controlled by a person within sub-paragraph (v). |
| |
(3) | The CIS-based close company conditions are that— |
| 30 |
(a) | D is a CIS-based close company at all times when the close company |
| |
| |
(b) | C is not resident in a non-qualifying territory at any such time, and |
| |
(c) | D is a small or medium-sized enterprise for the actual accrual period. |
| |
(4) | The CIS limited partnership conditions are that— |
| 35 |
(a) | the debt is one which is owed to, or to persons acting for, a CIS limited |
| |
| |
(b) | no member of that partnership is resident in a non-qualifying territory |
| |
at any time in the actual accrual period, |
| |
(c) | D has received written notice from the partnership containing |
| 40 |
information from which it appears that the condition in paragraph (b) |
| |
| |
(d) | D is a small or medium-sized enterprise for the actual accrual period. |
| |
(5) | Section 376 applies for the interpretation of this section. |
| |
|
| |
|