CFM35620 - Loan relationships: consortia companies and impairment: how the restriction works

CTA09/S364

When does Chapter 7 apply?

Chapter 7 sets out rules to ensure that consortia companies cannot, in effect, obtain double tax relief for the same loss.

The rules apply when:

  • there is (or was) a 'relevant consortium creditor relationship', and
  • an impairment loss or a debit for a release of the liability (a 바카라 사이트˜release debit바카라 사이트™) under the 바카라 사이트˜relevant consortium creditor relationship바카라 사이트™ is or has previously been brought into account for any 바카라 사이트˜group accounting period바카라 사이트™.

See the example at CFM35630.

Ìý

Relevant consortium creditor relationship

A 'relevant consortium creditor relationship' is where

  • the lender is a member of a consortium that owns a 'consortium company', or a member of the same group of companies as such a company
  • the borrower is the consortium company or (if that company is a holding company) a subsidiary of that company.

Ìý

Consortium company

A consortium company is a company that falls within CTA10/Part5. It is a company owned by a consortium which is

  • a trading company owned directly by the consortium, or
  • a trading company that is a 90% subsidiary of a holding company owned directly by the consortium, or
  • a holding company owned directly by the consortium.

Ìý

Group accounting period

A group accounting period is defined in CTA09/S370. It is any accounting period of the consortium member

  • beginning on or after 1 October 2002, or
  • corresponding to such an accounting period.

An accounting period of a group member will correspond with that of a consortium member if

  • the two accounting periods coincide, or
  • the consortium member바카라 사이트™s accounting period includes more than half of the group member바카라 사이트™s accounting period, or
  • the consortium member바카라 사이트™s accounting period includes part of the group member바카라 사이트™s accounting period, where the rest of the group member바카라 사이트™s accounting period doesn바카라 사이트™t fall within any accounting period of the consortium member.