Subject to any express provision to the contrary, any amount brought into the loan relationships computation is not to be brought into account for corporation tax under any other provision1.
Derivative contracts
An amount which is brought into account under the loan relationship regime cannot be brought into account under the derivative contracts regime2.
This rule does not apply, however, where in a company's accounts a loan relationship is bifurcated into a host contract (which is taxed under the provisions of the loan relationships legislation) and an embedded derivative (which is treated as a relevant contract for the purposes of the derivative contracts legislation and is only taxable under that legislation (see D1.723))3.
In certain cases any profits or losses arising in respect of the embedded derivative are treated as giving rise to chargeable gains or allowable losses on the basis in which the profits or losses arising in respect of the embedded derivative are recognised in the company's accounts (see D1.885–D1.888)4. Whilst these provisions remain on the
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Web page updated on 17 Mar 2025 13:28