The FRS 102 treatment of non-commercial loans creates notional finance charges. Finance Bill 2016 excludes these from tax accounts where their inclusion would create an asymmetric tax treatment, writes David Southern QC (Temple Tax Chambers).
Schedule 7 of the Finance Bill 2016 (FB 2016) makes limited changes to the loan relationships and derivative contracts rules. The aim of these changes is to remove asymmetries in tax accounting for deemed finance charges i.e. cases where a notional finance charge is incurred and a deductible loan relationship debit of 100 in the debtor company is not matched by a corresponding credit of 100 in a creditor company.
These measures can only be understood in the context of earlier wide ranging accounting and legislative changes in particular:
‘Modernising the taxation of corporate debt and financial instruments’ (6...
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The FRS 102 treatment of non-commercial loans creates notional finance charges. Finance Bill 2016 excludes these from tax accounts where their inclusion would create an asymmetric tax treatment, writes David Southern QC (Temple Tax Chambers).
Schedule 7 of the Finance Bill 2016 (FB 2016) makes limited changes to the loan relationships and derivative contracts rules. The aim of these changes is to remove asymmetries in tax accounting for deemed finance charges i.e. cases where a notional finance charge is incurred and a deductible loan relationship debit of 100 in the debtor company is not matched by a corresponding credit of 100 in a creditor company.
These measures can only be understood in the context of earlier wide ranging accounting and legislative changes in particular:
‘Modernising the taxation of corporate debt and financial instruments’ (6...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
