Finance Bill 2011 will significantly revise the loan relationships and derivative contracts rules which apply where amounts are ‘not fully recognised for accounting purposes’. The current legislation applies only to specific cases of derecognition. The new legislation will apply essentially to any case of derecognition, subject to a ‘main purposes’ defence. Taxpayers will find that many commonplace financial transactions are caught by the ‘derecognition’ limb of the new rules, and will need be sure that they have a robust ‘main purposes’ defence.