Corporation Tax – Debt buy-back rules
Draft guidance has been published relating to recent changes to the loan relationships rules on debt buy-backs. The draft guidance deals especially with the rules on releases of debts by connected companies.
The new legislation, now contained in the Finance Act 2010, was announced on 14 October 2009 and will apply to releases of debt that occurred on or after 9 November 2009 in relation to any debt that was the subject of a debt buyback occurring on or after 14 October 2009.
The draft guidance which has now been published is provisional. Once finalised the guidance will be included in the Corporate Finance Manual (CFM). The guidance includes a number of different scenarios and examples. Comments on the draft guidance should be sent to firstname.lastname@example.org email@example.com by 28 May 2010.