Section 198 | Balancing payments by guarantor to borrower: no charge to, or relief from, tax

(1)If each of the qualifying conditions (see section 197) is met, subsection (2) applies to the balancing payments made by all of the guarantors if, or so far as, the total amount of those payments does not exceed the total amount of the reductions within section 197(4) that are result of the application of section 153A.^F1F2

(2)Payments to which this subsection applies—

(a)are not to be taken into account in calculating for tax purposes the profits or losses of the guarantor company or companies or the borrower, and^F3F4

(b)are not for any purpose of the ... Tax Acts to be regarded as distributions.^F5

(3)In this section, the following expressions have the meaning given by section 197—^F6

“the balancing payments”,

“the guarantor company”, and