David Hill answers a question on convertible loan notes
A: Part 5 of the Corporation Tax Act 2009 defines a loan relationship as the 
relationship that subsists when a ‘company stands in the position of a creditor or debtor as respects any money debt (whether by reference to a security or otherwise) and the debt arises from a transaction for the lending of money’.
The definition of a money debt specifically includes instances where a debt falls to be settled by the issue of shares in a company bringing the interest on the convertible loan notes into the loan relationship rules.
The interest payments on the remaining convertible loan notes would therefore normally be deductible for corporation tax purposes.
However CTA 2010 s 1000 sets out when payments from a...
