Section 419 | Section 418: supplementary ^F1

(1)References in section 418 to a company being a party to a loan relationship as debtor or creditor include a company which indirectly stands in the position of a debtor or creditor as respects the loan relationship by reference to a series of loan relationships or relevant money debts.

(2)In subsection (1) “relevant money debt” means a money debt that would be a loan relationship if a company directly stood in the position of debtor or creditor.

(3)For the purposes of section 418 an accounting period of the creditor corresponds with an accounting period of the debtor if—

(a)it coincides with it, or

(b)it is wholly or partly within it.

(4)If a corresponding accounting period of the creditor does not coincide with that of the debtor, such apportionments as are just and reasonable are to be made for the purposes of section 418.

(5)Two companies are connected for the purposes of section 418 if their accounting results are reflected in the consolidated group accounts of a group of companies.

(6)Subsection (5) does not affect the application of section 1122 of CTA 2010 (how to tell whether persons are connected).^F2

(6A)References in section 418 to a company bringing debits or credits into account under or for the purposes of this Part include bringing debits or credits into account under or for the purposes of this Part in determining the chargeable profits of the company (or in determining that there were no such profits) for the purposes of Chapter 4 of Part 17 of ICTA (controlled foreign companies).^F3

(7)In this section “the debtor” and “the creditor” have the same meaning as in section 418.