Paul Shaw and Kevin Cummings explain how to handle the tax rules on this topical issue.
The loan relationships code in CTA 2009 Part 5 governs the tax treatment of lending transactions for UK corporate taxpayers. The general rule under the loan relationships code is that save where the legislation expressly states otherwise a company is required to bring into account those credits and debits that are recognised in determining its profit or loss in accordance with GAAP. As a starting point therefore credits and debits will be required to be brought into account for tax purposes where credits and debits are recognised in the relevant financial statements of a company.
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